The EUR/USD pair is trading above 1.1100, supported by increasing expectations for a larger-than-expected rate cut by the Federal Reserve (Fed) at its upcoming meeting. The CME Fedwatch tool shows a significant increase in the probability of a 50 basis points (bps) rate cut.
US Economic Data
The US Retail Sales data for August came in slightly better than expected, providing some support for the US Dollar (USD). However, the focus remains on the Fed’s monetary policy decision.
ECB Monetary Policy
The European Central Bank (ECB) is expected to maintain its current monetary policy stance, with a focus on data-driven decision-making. ECB officials have indicated a low probability of a rate cut in October.
EUR/USD Technical Analysis
The EUR/USD pair has broken above the 20-day Exponential Moving Average (EMA), indicating a bullish trend. The 14-day Relative Strength Index (RSI) is approaching 60.00, suggesting potential bullish momentum.
