EUR/USD: ECB rate cut bets rise, focus on Fed


  • EUR/USD is on the defensive, courtesy of dovish ECB
  • Markets have priced in at least two Fed rate cuts for 2019. 
  • Fed will have a hard time beating market expectations. 

EUR/USD will likely trade on the defensive ahead of the Fed, courtesy of rising odds of rate cuts by the European Central Bank (ECB). 

The ECB President Mario Draghi hinted at more stimulus on Tuesday, sending the EUR lower across the board. 

Notably, the money markets have pulled forward expectations of a 10 basis point rate cut to December from March 2020 seen last week. Further, markets are now also pricing 15 basis point rate cut by June 2020. 

As a result, the EUR/USD pair could find acceptance below 1.1180 (Tuesday's low) ahead of the US Federal Open Market Committee (FOMC) rate decision due at 18:00 GMT today. As of writing, the pair is trading at 1.1192, having hit a high of 1.1202 in the Asian session. 

Focus on FOMC

The US Federal Reserve is expected to keep rates unchanged today and lay the groundwork for a rate cut later this year. The market is fully pricing in two 25bps rate cuts by the end of the December FOMC meeting and a 50% chance of a third, according to Reuters. 

With two rate cuts already priced in, the Fed is going to have a hard time beating market expectations. Moreover, with the US stock markets near record highs, the Fed has little room to sound exceedingly dovish. 

Add to that the rising odds of ECB rate cuts and the EUR/USD pair looks set for a deeper drop. 

That said, a minor bounce could be seen if the Fed does signal two rate cuts by the year-end. However, a bullish reversal in EUR/USD would be confirmed only above the recent high of 1.1348. 

Pivot levels

EUR/USD

Overview
Today last price 1.1194
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.1194
 
Trends
Daily SMA20 1.1224
Daily SMA50 1.1218
Daily SMA100 1.1267
Daily SMA200 1.1357
Levels
Previous Daily High 1.1244
Previous Daily Low 1.1181
Previous Weekly High 1.1344
Previous Weekly Low 1.1202
Previous Monthly High 1.1266
Previous Monthly Low 1.1107
Daily Fibonacci 38.2% 1.1205
Daily Fibonacci 61.8% 1.122
Daily Pivot Point S1 1.1168
Daily Pivot Point S2 1.1143
Daily Pivot Point S3 1.1105
Daily Pivot Point R1 1.1232
Daily Pivot Point R2 1.127
Daily Pivot Point R3 1.1295

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD recaptures 1.1300 amid falling yields, EZ inflation eyed

EUR/USD is trading above 1.1300, extending the upside amid a renewed risk-off wave. The US dollar tracks the sell-off in the Treasury yields, shrugging off Moderna Inc.'s warning against the Omicron covid variant. Eurozone inflation, Powell’s testimony awaited.

EUR/USD News

GBP/USD rebound appears capped near 1.3330 amid risk-aversion

GBP/USD is making a minor recovery attempt above 1.3300 on Tuesday, as the US dollar turns south again in tandem with the Treasury yields. Renewed Omicron covid variant fears damp the market mood as well as the pound. Focus on covid updates, US data and Powell.

GBP/USD News

Gold inches back closer to $1,800 amid Omicron variant fears

Gold picks up bids to refresh intraday high. Risk appetite improves as market players reassess covid variant fears. Policymakers, experts reject concerns over the need for major lockdowns, readiness to have vaccines sooner.

Gold News

XRP price on edge of cliff as Ripple faces imminent collapse

XRP price followed the rest of the cryptocurrency market lower over the weekend. The US Thanksgiving holiday gave cryptocurrency traders and investors some early Black Friday deals, but downside risks remain.

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures