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The Euro continued its downward spiral, hitting a new ten-week low on Monday. The currency depreciated by 0.25% against the US Dollar, breaching the 200-day Exponential Moving Average (EMA). This decline reflects the overall strengthening of the US Dollar and the weakening Euro.
Investors are eagerly awaiting the release of the European Central Bank (ECB) Lending Survey on Tuesday. This report will provide insights into the health of the pan-European banking sector.
On Thursday, the European Union will publish its final Harmonized Index of Consumer Prices (HICP) inflation figures. However, these figures are not expected to significantly impact market volatility as investors focus on the ECB’s interest rate decision. The ECB is widely anticipated to reduce interest rates by 25 basis points.
In the United States, the most significant economic data release this week is the Retail Sales report on Thursday. Analysts predict a modest increase of 0.3% in September compared to the previous month’s 0.1%.
EUR/USD Price Outlook
The Euro is currently under significant bearish pressure. It has fallen below the 200-day EMA and is approaching the 1.0900 support level. The pair has experienced a decline of nearly 3% from its September peak.
The performance of EUR/USD around the 200-day EMA will be crucial in determining its short-term direction. A sustained break below this level could lead to further declines, with the next support zone at 1.0850. Conversely, if the Euro can reclaim the 200-day EMA and rise above 1.09063, it may alleviate some bearish pressure. However, the 50-day EMA remains a significant resistance level that needs to be breached for a sustained bullish reversal.
The technical outlook remains bearish as long as the Euro stays below the 50-day EMA. While the 200-day EMA may offer temporary support, the current trend suggests continued downside risks. The lack of a strong bullish catalyst means the Euro could remain under pressure. Traders will be watching for further signs of weakness, especially if the pair remains below key moving averages.
