Euro dollar fundamental overview
Expectations that the ECB will proceed with rate cuts are strengthening as the German economic outlook appears to be worsening due to the weak demand outlook. Data on Monday showed that Germany’s IFO expectations index unexpectedly fell to 89.0 from estimates of 91.0 and the previous release of 90.3 (revised down from 90.4).
The euro-dollar pair is also under pressure as appetite for risk-sensitive assets weakens due to aggressive interest rate guidance from Fed policymakers. The Federal Reserve continues to advocate maintaining the current interest rate framework as it wants to see inflation decline for months before considering rate cuts. US inflation fell more than expected in May, however, officials predict that a one-off drop in price pressure will not be enough to make rate cuts adequate.
Technical Analysis and Euro Dollar Forecasts
At the time of writing, the fiber price was trading at 1.0686, down 0.09% and about to continue the bearish trend after exceeding the key level of 1.0700 particularly easily. A confirmation of the closing below 1.0700 would allow the euro-dollar to attempt a bearish extension up to the annual level of 1.0643.
On the upside, a return of the short-term LONG trend will only be confirmed by a close above 1.0720, with the annual level 1.0764 representing the target and first hard bullish rock. A break above the aforementioned level could push the fiber to reach the key 1.0800 level.
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