10/06/2024
📉🇺🇸🇪🇺EURUSD opened with a gap down this week.
👉As previously expected, the ECB rate cut put pressure on the EUR after the publication of mixed data on the US labor market.
The sharp decline in the EURUSD began on Friday and continued at the market opening today. One of the ECB's speakers, the head of the Austrian central bank, Robert Holzmann, said in an interview on Saturday that a further ECB rate cut in the absence of cuts from the US Federal Reserve would have a downward effect on the euro exchange rate, which could also cause higher inflation. In general, Holzmann was against a rate cut, but his comments may provide some support for the EUR, especially if other ECB officials join them.
👉The next "hot" day awaits us on Wednesday, 12.06, when the US CPI data will be published, as well as the Fed's rate decision will be published. JP Morgan and Goldman Sachs have predicted that there will be no rate cut, but both investment banks expect the "dovish tone" of Fed Chairman Powell. At the same time, both banks slightly tightened their forecast from 3 declines to 2 in 2024. At the same time, the CME FedWatch Tool again indicates that the market is laying down only one Fed rate cut in September this year, the market is waiting for the next cut in January 2025.
👉The ratio of buyers and sellers in the EURUSD pair is close to parity, which indicates the uncertainty of the market at the moment.
Technically, the price broke through the 1.0800 - 1.0805 level at the end of last week and is currently testing the strength of the support level in the range of 1.0745 - 1.0775. At the same time, we have a price gap between 1.0797 and 1.0774, which will attract the price, since usually the price covers these gaps. If the 1.0745 - 1.0775 level holds, then we can expect a correction to the 1.0800 - 1.0805 level, which will allow us to test it and close the gap. If the level of 1.0745 - 1.0775 does not hold, then we can expect a further decline in the price to the support level in the range of 1.0670 - 1.0700.
💡Today we have no important economic news, and several speeches by European officials are expected tomorrow. It is quite possible to expect some correction before the publication of the rate decision and CPI data in the United States. At the same time, a deeper price dip cannot be ruled out, so it is worth keeping an eye on the current level of 1.0745 - 1.0775 and considering breakout/rebound deals.
