EUR/USD prediction. Eurozone inflation fell below ECB target in September

euro dollar:

During Wednesday’s Asian trading session, EUR/USD was slightly higher around 1.1070. Meanwhile, signs of rising geopolitical tensions in the Middle East could weigh on risk assets such as the euro (EUR).

Traders still expect the US Federal Reserve to cut rates sharply in November after Fed Chair Jerome Powell said the US central bank was in no hurry to lower benchmark interest rates “over time” We are assessing the possibility of doing so. Financial markets currently estimate the probability of a 50 basis point (bp) rate cut in November to be nearly 37.4%, while the probability of a 25bp rate cut is 62.6%, according to data from the CME FedWatch tool. are.

Unfavorable economic data released in the US on Tuesday caused the dollar to fall. The US manufacturing PMI for September announced by ISM remained unchanged at 47.2, lower than the expected 47.5. The report noted that the U.S. manufacturing sector continues to shrink.

Eurozone inflation fell in September, falling below the European Central Bank’s (ECB) target level. The Harmonized Consumer Price Index (HICP) rose 1.8% in September, down from 2.2% in August, Eurostat said on Tuesday. This number was the lowest since April 2021. Despite September’s positive inflation data, the eurozone economy may not be out of the woods yet. The ECB cut interest rates to 3.50% in September, but has signaled that further cuts may be made in the near future.

Concerns about further war in the Middle East could put pressure on the common currency, pushing safe-haven assets such as the U.S. dollar higher. Iran fired more than 200 ballistic missiles at Israel on Tuesday, and Prime Minister Benjamin Netanyahu vowed to retaliate against Iran for the missile attack.

Trading Recommendation: Keep an eye on the 1.1070 level and consider a buy position if the level is fixed above or a sell position if the level is rebounding.

Source: FreshForex

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