EUR/USD: ECB cut is a done deal – OCBC
ECB policy decision is due today (815pm SG time) followed by Lagarde’s press conference (845pm SGT). Softer CPI prints out of Euro-area, Germany and Spain and softer mfg PMI readings added to expectation that ECB should be on course to lower rate again, OCBC’s FX analysts Frances Cheung and Christopher Wong note.
Rate cut decision is more or less a done deal
“Markets have priced in 25bp cut at this meeting and about 38bp cut for remainder of the year (another 1.5 cut). While a rate cut decision is more or less a done deal, focus is on Lagarde’s press conference and staff macroeconomic projection. So far, ECB officials have not been outright dovish, and officials seemed to posture for a more gradual pace when it comes to policy easing.”
“Potentially, ECB may even turn out to be a non-event if officials reiterate that policy is not on a preset cycle and policy making remains data dependent. EUR was last seen at 1.1010 levels. Bearish momentum on daily chart intact while RSI fell. Risks are skewed to the downside for now.”
“Support at 1.0970 (50 DMA, 38.2% fibo retracement of 2024 low to high), 1.09 (50% fibo). Resistance at 1.1060 (23.6% fibo), 1.1080 (21 DMA).”
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