EUR/USD Forecast – Prices, Charts, Analysis
- The market is currently calling for the ECB to cut interest rates in April.
- EUR/USD is currently trading at multi-week lows.
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The euro fell after Thursday’s ECB press conference, even though Lagarde said little. The central bank yesterday left all policy tools untouched, reiterating that any changes to monetary policy would depend on data and giving no hint of a future action schedule. However, markets are now calling for the ECB to cut rates sooner and further, with slower growth in the eurozone and falling inflation behind the move. Both before and after the central bank meeting, markets were expecting a 125 basis point rate cut in the euro zone this year, with the first move seen at the end of the first half. The market is currently expecting a rate cut of more than 142 basis points (bp), with a 76% probability that the first rate cut will be announced in April.
ECB suggested interest rate and basis points
The recent euro depreciation has pushed the EUR/USD pair to multi-week lows and has seen a series of highs and lows in the short term. The 200-day simple moving average is also testing closes and opens below this indicator, with EUR/USD likely to fall below 1.0800 and head towards the previous lows on either side of 1.0750. The latest U.S. core PCE data is expected to be released later today. This is the Fed’s preferred inflation measure, and any deviation from expectations will determine the direction of the USD and EUR/USD heading into the weekend.
EUR/USD daily chart
|
change |
long |
shorts |
OI |
| every day | 7% | -14% | -Four% |
| weekly | 2% | -15% | -6% |
Charts using TradingView
According to IG Retail Trader data, 58.93% of traders are net long, with a trader long-to-short ratio of 1.43:1. The number of net long traders increased by 22.58% from yesterday and by 17.36% from last week. Net short by traders is 15.04% lower than yesterday and 15.65% lower than last week.
To see what this means for EUR/USD, download the full retail sentiment report below.
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