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EUR/USD pair declined to near 1.0520 on Tuesday as investors braced for key economic events, including the US inflation report and the ECB monetary policy meeting.
ECB Expected to Cut Rates
The ECB is widely anticipated to reduce its Deposit Facility Rate by 25 basis points to 3% on Thursday. This would mark the third consecutive rate cut, driven by factors such as the US presidential election, political instability in Europe, and a slowdown in the Eurozone economy.
US Inflation in Spotlight
The US Consumer Price Index (CPI) data for November is scheduled for release on Wednesday. The market expects a modest increase in both headline and core CPI. While this data is unlikely to significantly impact Fed rate expectations, a significant deviation could influence market sentiment.
Technical Analysis
The EUR/USD pair’s technical outlook appears bearish. The RSI and MACD indicators signal weakening bullish momentum. A break below the 20-day SMA could lead to further declines, with potential support levels at 1.0500 and 1.0480. For a bullish reversal, the pair would need to reclaim the 20-day SMA and break above the 1.0600 resistance level.
Key Takeaways:
ECB expected to cut rates on Thursday
US inflation data to be released on Wednesday
EUR/USD technical outlook is bearish
Potential support and resistance levels identified
Note: This is a simplified version of the original text, focusing on the key points. For a more detailed analysis, please refer to the original article.
