EUR/USD weakens to near 1.0400 in a quiet trading session
Let’s update the news and forecast the trend of the EUR/USD currency pair together!
The EUR/USD currency pair is primarily influenced by fundamental factors related to the monetary policies of the U.S. Federal Reserve (Fed) and the European Central Bank (ECB).
In the U.S., expectations that the Fed will scale back interest rate cuts in 2025 have somewhat supported the U.S. Dollar (USD). In its recent meeting, the Fed lowered the benchmark interest rate by 25 basis points but simultaneously eased expectations for further rate cuts in the future. This suggests that the Fed may maintain a tighter monetary policy and continue to apply higher interest rates for a longer period, which supports the strong trend of the USD.
On the other hand, in the Eurozone, the Euro (EUR) is under downward pressure due to expectations that the ECB will continue to reduce interest rates. ECB President Christine Lagarde stated that the Eurozone is now "very close" to the bank's medium-term inflation target. However, if inflation continues to fall, the ECB may need to further cut interest rates to stimulate growth, which would exert downward pressure on the Euro.
From a technical perspective, the EUR/USD is currently trading around the 1.0400 level, a key support level to watch. If this level is breached, the pair is likely to continue its downward trend, with the next support around the 1.0300 area.
Moreover, with trading volumes potentially low ahead of the holiday season, price movements may not be as strong. However, the fundamental factors, particularly the monetary policies of the Fed and ECB, will continue to be the dominant drivers shaping the long-term trend of this currency pair.
The EUR/USD currency pair is primarily influenced by fundamental factors related to the monetary policies of the U.S. Federal Reserve (Fed) and the European Central Bank (ECB).
In the U.S., expectations that the Fed will scale back interest rate cuts in 2025 have somewhat supported the U.S. Dollar (USD). In its recent meeting, the Fed lowered the benchmark interest rate by 25 basis points but simultaneously eased expectations for further rate cuts in the future. This suggests that the Fed may maintain a tighter monetary policy and continue to apply higher interest rates for a longer period, which supports the strong trend of the USD.
On the other hand, in the Eurozone, the Euro (EUR) is under downward pressure due to expectations that the ECB will continue to reduce interest rates. ECB President Christine Lagarde stated that the Eurozone is now "very close" to the bank's medium-term inflation target. However, if inflation continues to fall, the ECB may need to further cut interest rates to stimulate growth, which would exert downward pressure on the Euro.
From a technical perspective, the EUR/USD is currently trading around the 1.0400 level, a key support level to watch. If this level is breached, the pair is likely to continue its downward trend, with the next support around the 1.0300 area.
Moreover, with trading volumes potentially low ahead of the holiday season, price movements may not be as strong. However, the fundamental factors, particularly the monetary policies of the Fed and ECB, will continue to be the dominant drivers shaping the long-term trend of this currency pair.
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