Compared to the strong U.S. economy, the weaker European economy and rapid interest rate cuts have caused the euro to fall. It dropped from around $1.12 (where it hit a double top) below the $1.10 support level, reaching around $1.07. Last week, the euro’s decline finally paused.
This week, Germany’s October CPI and the Eurozone’s October HICP are expected to increase from the previous month. If this happens, it might temporarily ease expectations of further rate cuts, which could lead to more euro buying. Additionally, traders may adjust their positions ahead of next week’s FOMC meeting in the U.S.
However, the difference in monetary policy between the U.S. Federal Reserve (Fed) and the European Central Bank (ECB) still favors euro selling, so we are looking to sell when the euro rises.
This week’s forecast range for EUR/USD: 1.0880- 1.0700
Note: The above content does not guarantee profits. Please make your own trading decisions.