Last week, the euro had trouble rising against the dollar due to fading expectations of a big interest rate cut by the U.S. Federal Reserve and increasing chances of a rate cut by the European Central Bank (ECB). By the end of last week, the euro dropped below $1.10, which was the support level formed by the high points in August and September, and fell to around $1.0950. Because of this double top pattern, the euro is expected to drop further this week.
ECB President Lagarde mentioned that Europe is facing challenges in its recovery and expressed more confidence in reaching the 2% inflation target. Several other ECB officials also made cautious comments, and weak European economic data has raised the chances of an interest rate cut. On the other hand, strong U.S. economic data has reduced the likelihood of a large rate cut by the Federal Reserve. This week, the euro’s weakness compared to the dollar is expected to continue, with a potential drop to the Fibonacci retracement level of around $1.0850.
This week’s expected range for EUR/USD: $1.1030–$1.0880 (61.8%).
Please note that this information does not guarantee profits, so make your own decisions when trading.