EUR/USD: Potential Negative Impact on EUR/USD Expected from December Fed and ECB Meetings.
FUNDAMENTAL OVERVIEW:
Analysts at Morgan Stanley Research anticipate that this month’s monetary policy meetings of the Federal Reserve and the European Central Bank (ECB) could act as negative catalysts for the EUR/USD currency pair. In a note, they highlight potential contrasts between Federal Reserve rhetoric and market expectations, where current pricing implies an approximately 85% chance of rate cuts in 2024. Additionally, the analysts point out that the ECB’s risk lies in the possibility that new 2026 forecasts may indicate inflation below 2%, leading to increased discussions of rate cuts in early 2024. As of the latest update, EUR/USD is trading 0.2% lower at 1.0866.
Technical Overview
- Moving Averages:
- Exponential:
- MA 10: 1.09 (Negative Crossover – Bearish)
- MA 20: 1.09 (Positive Crossover – Bullish)
- MA 50: 1.08 (Positive Crossover – Bullish)
- Simple:
- MA 10: 1.09 (Negative Crossover – Bearish)
- MA 20: 1.09 (Positive Crossover – Bullish)
- MA 50: 1.07 (Positive Crossover – Bullish)
- RSI (Relative Strength Index): 55.86 (Neutral Zone – Neutral)
- Stochastic Oscillator: 48.83 (Neutral Zone – Neutral)
- Resistance and Support Levels:
- R1: 1.08951
- R2: 1.09668
- S1: 1.08552
- S2: 1.07619
- Overall Sentiment: Bullish
- Market Direction: Buy
- Trade Suggestion: Limit Buy: 1.08951, Take Profit: 1.09668, Stop Loss: 1.08444