Euro Declines Following Disappointing EU Data

Fundamental Analysis

* Data Slump: The Euro is losing ground against the dollar after weak inflation data has cast a gloomy outlook for the Eurozone. The Consumer Price Index (CPI) dropped to 1.8%, marking the first time in 39 months it has fallen below the European Central Bank’s (ECB) 2.0% target. This raises the likelihood of the ECB adopting a more aggressive stance on cutting interest rates, which could further pressure the Euro by deterring foreign capital inflows. Meanwhile, in the U.S., expectations for another Federal Reserve rate cut in November are fading after its recent 50 basis point cut. Strong U.S. employment data is bolstering confidence in the economy, with JOLTS Job Openings rising to 8.04 million in August from a revised 7.71 million in July, and ADP Employment Change climbing to 142K in September, beating both the previous month’s 103K and forecasts of 120K.

Technical Analysis

* Technical Breakout: : The price recently breaks below its recent bearish market structure and MACD remains on bearish signals potential for further losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the support level 1.09450 after it breach below the level 1.10250. Conversely, a potential reversal is also to be expected and the price could head back towards 1.11100.

Potential Risks

Looking ahead, markets now await the US’s most important labor report, the Nonfarm Payrolls (NFP) scheduled for release on Friday to further gauge Fed potential direction.

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Monitoring

Stay updated on US and EU data, central bank updates and any shifts in the US Dollar’s strength by following PU Xtrader’s financial news page.

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