Market News

EUR/USD Focus: ECB Rate Cut Amid Euro Weakness

EUR/USD ECB Rate Cuts

The EUR/USD is under pressure as markets push for early ECB rate cuts. The Euro is weakening amid growth concerns, and traders are watching key data.

EUR/USD Forecast – Prices and Analysis

The Euro (EUR/USD) has recently grappled with mounting pressure as markets advocate for the European Central Bank (ECB) to initiate rate cuts earlier than anticipated.

The EUR/USD forecast reveals a shift in market sentiment, with a growing push for an ECB rate cut in April. Currently, EUR/USD is trading at a multi-week low, signaling increased investor concerns.

Thursday’s ECB press conference saw the Euro weaken despite President Lagarde offering minimal insights. The central bank maintained its stance by leaving all policy levers untouched, emphasizing that any alterations in monetary policy hinge on data and providing no indication of a timeline for future actions. However, markets are now anticipating proactive measures from the ECB, driven by sluggish Euro Area growth and declining inflation.

EUR/USD Focus: ECB Rate Cut Amid Euro Weakness

Both before and after the central bank meeting, market projections indicated 125 basis points of cuts in the Euro Area this year, with the initial move expected by the end of H1. Investors expect an upward revision in the current market sentiment, anticipating over 142 basis points of cuts with a 76% probability that authorities will announce the first cut in April.

The recent spell of Euro weakness has led to EUR/USD hitting a fresh multi-week low, sustaining a short-term pattern of lower highs and lower lows. The market is currently testing the 200-day simple moving average, and a close and open below this indicator could push EUR/USD below 1.0800, moving toward a cluster of prior lows around 1.0750.

Today’s spotlight is on the release of the latest US Core PCE data, the Federal Reserve’s preferred measure of inflation. Any deviation from expectations in this data will likely influence the US dollar and impact the trajectory of EUR/USD heading into the weekend.

EUR/USD Market Snapshot

Bearish Outlook

  • 56% of clients are net long.

Change in Longs, Shorts, OI

  • Daily: 19% increase in longs, 18% decrease in shorts, no change in open interest.
  • Weekly: 15% increase in longs, 18% decrease in shorts, 1% decrease in open interest.

IG retail trader data reveals that 58.93% of traders are net-long, with the long-to-short ratio at 1.43 to 1. The number of traders net-long has surged by 22.58% compared to yesterday and is 17.36% higher than last week. Simultaneously, the number of traders’ net short has declined by 15.04% from yesterday and 15.65% from the previous week. The evolving sentiment among retail traders underscores the dynamic landscape of the Euro’s current market position.

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