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  • EUR/USD dips to 1.0773 amid ECB officials' dovish comments and a sparse Eurozone calendar.
  • Remarks by ECB's De Cos and Lane increase expectations for swift disinflation, suggesting a sooner policy shift.
  • Fed's Logan and Bostic adopt a cautious approach to rate cuts, prioritizing inflation control.
  • EU's ZEW Economic Sentiment Index and upcoming US CPI data set to influence EUR/USD, with inflation forecast to decline.

The Euro registered minuscule losses against the US Dollar early during Monday’s North American session, as some European Central Bank (ECB) officials were dovish, laying the ground to cut rates. That and a scarce economic calendar in the Eurozone keep traders leaning on last week’s speeches and the important US inflation report on Tuesday. The EUR/USD trades at 1.0763, down 0.14%.

Euro weighed by ECB’s officials make dovish comments

Last week, De Cos seemed confident that the 2% mid-term target would be achieved, “taking into account the associated risks and, second, the rate path that is compatible with reaching our symmetric target.” Last Friday, the ECB’s Chief Economist Lane said that “incoming data suggests that the process of disinflation in the near-term, in fact, may run faster,” which implies the ECB could pivot based on recently released data.

Over the weekend, comments by ECB’s Governing Council Panetta fueled speculation that Lagarde and Co. might cut rates earlier than the US Federal Reserve (Fed), opening the door for further EUR/USD downside. The market sees a 60% probability of a 25 bp rate cut in April and 125 bp of total easing this year.

Across the pond, Fed officials struck a more balanced tone, with Dallas Fed President Lorie Logan saying the risks are more balanced and there was no urgency on rate cuts. Her colleague Atlanta’s Fed President Raphael Bostic dialed back his 2023 Q4’s dovish rhetoric and said he’s still “laser-focused” on inflation.

On Tuesday, the EU's economic calendar will feature the February ZEW Economic Sentiment Index for Germany and the bloc. On the US, February’s Consumer Price Index (CPI) figures could move the needle in the EUR/USD pair. Market players expect a dip in CPI from 3.4% to 2.9% YoY and core CPI on an annual basis to edge lower from 3.9% to 3.7%.

EUR/USD Price Analysis: Technical outlook

The EUR/USD is downward biased as depicted by the daily chart. The pair pierced the 100-day Moving Average (DMA) at 1.0789 and reached 1.0800 but slipped past those two levels extending its losses toward the 1.0760s area. If broken, further downside is seen below the February 6 low of 1.0722, ahead of the 1.0700 mark. On the flip side, if buyers lift the spot price above 1.0789, that could open the door to challenge 1.0800.

EUR/USD TECHNICAL LEVELS

Overview
Today last price 1.0772
Today Daily Change -0.0014
Today Daily Change % -0.13
Today daily open 1.0786
 
Trends
Daily SMA20 1.0838
Daily SMA50 1.0894
Daily SMA100 1.0788
Daily SMA200 1.0833
 
Levels
Previous Daily High 1.0795
Previous Daily Low 1.0762
Previous Weekly High 1.0795
Previous Weekly Low 1.0723
Previous Monthly High 1.1046
Previous Monthly Low 1.0795
Daily Fibonacci 38.2% 1.0783
Daily Fibonacci 61.8% 1.0775
Daily Pivot Point S1 1.0767
Daily Pivot Point S2 1.0748
Daily Pivot Point S3 1.0734
Daily Pivot Point R1 1.08
Daily Pivot Point R2 1.0814
Daily Pivot Point R3 1.0833

 

 

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