EUR/USD SHORT
Eurozone headline inflation is on the decline, while core inflation is only slightly increasing. Lower-than-expected inflation data from Germany and Spain have led to dovish expectations for the European Central Bank (ECB), increasing the likelihood of future rate cuts.
Economic indicators in the Eurozone present a mixed picture, with flash Purchasing Managers' Indexes (PMIs) showing manufacturing in contraction while services remain resilient but with slowing momentum. Weak GDP growth estimates and disappointing economic data from Germany and Spain further contribute to the weakening of the euro (EUR).
Market sentiment, as indicated by the BofA Bull & Bear Indicator, is neutral, with market hopes for Federal Reserve (Fed) rate cuts being seen as "as bullish as it gets." If the ECB moves forward with rate cuts while the Fed remains cautious, the EUR could weaken further against the US dollar (USD).
Recently, the EUR has underperformed following several Consumer Price Index (CPI) reports, particularly weaker-than-expected German inflation data. The market is currently pricing in less than one ECB rate cut by year-end, which could result in either consolidation or further declines for the EUR.
Economic indicators in the Eurozone present a mixed picture, with flash Purchasing Managers' Indexes (PMIs) showing manufacturing in contraction while services remain resilient but with slowing momentum. Weak GDP growth estimates and disappointing economic data from Germany and Spain further contribute to the weakening of the euro (EUR).
Market sentiment, as indicated by the BofA Bull & Bear Indicator, is neutral, with market hopes for Federal Reserve (Fed) rate cuts being seen as "as bullish as it gets." If the ECB moves forward with rate cuts while the Fed remains cautious, the EUR could weaken further against the US dollar (USD).
Recently, the EUR has underperformed following several Consumer Price Index (CPI) reports, particularly weaker-than-expected German inflation data. The market is currently pricing in less than one ECB rate cut by year-end, which could result in either consolidation or further declines for the EUR.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.