EUR/USD could resume declining as ECB considers further cut rates

The EUR/USD exchange rate is likely to continue falling as the European Central Bank is expected to lower interest rates again. The value of the EUR/USD pair is currently at 1.0800, but its future direction is uncertain due to expectations that the ECB will adopt a more lenient monetary policy. The Eurozone’s economy is predicted to grow slowly, while the US Dollar will be influenced by the outcome of the US presidential elections.

The EUR/USD pair is struggling to maintain its gains from the previous week, and it may fall back to its lowest level in 11 weeks. Investors anticipate that the ECB will continue to reduce interest rates to support the Eurozone economy.

Due to weak economic growth and inflation below the ECB’s target, investors believe the bank will lower interest rates again in December. An ECB policymaker recently suggested that modest economic growth could further reduce inflation pressures. The ECB’s own survey of economists has also revised downward its inflation forecast for next year.

ECB’s Governing Council member, Gediminas Šimkus, has indicated that interest rates may be lowered further if inflation continues to decline. Investors will closely watch ECB President Christine Lagarde’s speech for more clarity on interest rate expectations. In her previous press conference, Lagarde did not provide a specific interest rate path and stated that decisions would be based on future economic data.

The EUR/USD exchange rate is likely to continue falling as the US Dollar is expected to rise. The US Dollar Index has reached a new 11-week high, and market participants believe the Federal Reserve will continue to gradually lower interest rates. The outlook for the US Dollar remains positive as economic data suggests a resilient US economy. Investors will also be watching the October PMI data for more clues on the economic outlook.

The US presidential elections could impact the value of the US Dollar. Current polls show the Democratic candidate, Kamala Harris, has a lead over the Republican candidate, Donald Trump. The EUR/USD pair is struggling to hold above a key support level of 1.0800. It is currently trading below the 200-day EMA, which suggests a bearish outlook.

The EUR/USD pair’s downward trend began after a breakdown of a Double Top formation on a daily chart. The 14-day RSI indicates a strong bearish momentum, but there is also a possibility of a recovery.
On the downside, the EUR/USD pair may find support near the upward-sloping trendline at 1.0750. The 200-day EMA and the psychological figure of 1.1000 are key resistance levels.

ECB President Christine Lagarde is a former Managing Director of the International Monetary Fund and Minister of Finance in France. Her comments on the European economy can significantly influence the Euro’s value. A hawkish outlook can boost the Euro, while a dovish outlook can weigh on the common currency.