The EUR/USD pair has declined, driven by a weaker Euro (EUR) and a stronger US Dollar (USD). The Eurozone Purchasing Managers’ Index (PMI) for September unexpectedly contracted, indicating a potential slowdown in economic activity.
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. However, the recent PMI data suggests a potential need for further rate cuts.
US Dollar
The US Dollar has strengthened, supported by the expectation of continued Fed rate cuts and the release of mixed US PMI data. The CME Fedwatch tool shows a high probability of a 50 basis points (bps) rate cut in November.
Technical Analysis
The EUR/USD pair has fallen below 1.1100, with potential support at the 20-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is declining, indicating weakening momentum.
