ECB

Major central banks may further adjust monetary policy in 2025 as the European Central Bank (ECB) insists that ‘the disinflation process is well on track,’ but the Federal Reserve may change gears at a slower pace as Chairman Jerome Powell and Co. forecast less rate-cuts for next year.

Traders are eyeing the European Central Bank, which is set to announce its interest rate decision tomorrow. Market participants are eager to see if the ECB will maintain its cautious stance or signal any changes in policy amid the ongoing economic challenges in the Eurozone. This week’s developments could set the tone for EUR/USD outlook in the coming weeks.

EUR/USD snaps the series of higher highs and lows from last week after attempting to trade back above the former-support zone around the April low (1.0601).

Ahead of key macro events, the EUR/USD forecast remains modestly bearish, although the currency pair has found some love today thanks to optimism about more stimulus measures being introduced in China, one of the Eurozone’s major exports destinations.

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EURUSD Analysis: Following a double top formation at the 1.120 resistance, EURUSD reached the target, pressured by a strong dollar and dovish ECB. Will the decline continue?

The EUR/USD held near 1.0850, near its lowest level since early August. The other euro crosses were mixed. However, the EUR/JPY forecast hadn’t quite turned bearish yet as it held above a key support and traders watched whether the USD/JPY pair would hold its latest attempt to break the 150.00 in response to a series of US data beats.

EUR/USD bears have taken a swing and the pair is now working on its 13th red day in the past 14. And before that, bulls were persistently pushing into the 1.1200 handle so the contrast is stark. The question now is how dovish the ECB sounds at tomorrow’s widely-expected rate cut.

The ECB is expected to further unwind its restrictive policy in September, with the central bank projected to reduce Euro Area interest rates by 25bp.

EUR/USD has managed to recoup some of last week’s losses as we head into Friday’s nonfarm payroll report. But for it to stand any chance of to a fresh YTD high, US CPI likely needs to continue softening and the ECB surprise with a less-than-expected dovish cut on Thursday.

EURUSD, DXY Analysis: With the US Dollar Index (DXY) holding above its December 2023 support, a significant drop in Spanish inflation rates, and a general cooldown in energy prices, the EURUSD is poised for heightened volatility as the market begins to price in September's monetary policies ahead of August's monthly close.

Crude Oil Analysis: Amid growing haven demand for precious metals, geopolitical tensions have brought supply disruptions to the forefront, sharply lifting oil prices from their yearly lows.

It’s been a strong month for EUR/USD on the heels of the banks rate cut last month. And while they held off from any additional policy softening today, the door is open for more in the coming months.

EUR/USD stage a further advance ahead of the ECB meeting as it carves a series of higher highs and lows.

US data steps away from the limelight to make way for inflation reports from the UK, Canada, New Zealand, and Japan. And throw in an ECB meeting, Australian employment report and the CCP's Third Plenum for good measure.

EURUSD Forecast: EURUSD is trading above of its key consolidation ahead of FOMC minutes

EUR/USD is holding below its rising trend line and the 50-day EMA in the 1.0820 region, hinting at the potential for more downside in the coming week.