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EUR/USD Hovers Near 1.0850, Downside Seems Possible Due to Shift in Policies Outlook

Written by

Ezekiel Chew

Updated on

October 20, 2024

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EUR/USD Hovers Near 1.0850, Downside Seems Possible Due to Shift in Policies Outlook

Written by:

Last updated on:

October 20, 2024

The EUR/USD pair is hovering near the 1.0850 level, as market sentiment remains cautious amid expectations of shifting monetary policies. Investors are bracing for potential downside pressure on the euro, driven by increasing divergence between the European Central Bank (ECB) and the Federal Reserve.

Market analysts suggest that recent comments from ECB officials have dampened expectations for further aggressive rate hikes, signaling a more cautious approach to inflation control. Meanwhile, the Federal Reserve has maintained a hawkish stance, hinting at the possibility of additional tightening to curb inflation in the U.S.

The growing gap in monetary policy outlooks is leading to a stronger U.S. dollar, which could push the EUR/USD lower in the coming days. With inflation data from both regions set to be released next week, traders are eyeing key economic indicators to gauge the next moves from central banks.

Any significant divergence in inflation trends could amplify the pressure on the euro, particularly if the ECB holds back on raising rates while the Fed continues its tightening cycle. The currency pair's near-term performance will largely depend on how these policy shifts unfold.

For now, EUR/USD remains stuck in a tight range, but the broader outlook suggests potential for further weakness if market expectations of U.S. economic resilience continue to drive dollar strength.

About Ezekiel Chew​

Ezekiel Chew, founder and head of training at Asia Forex Mentor, is a renowned forex expert, frequently invited to speak at major industry events. Known for his deep market insights, Ezekiel is one of the top traders committed to supporting the trading community. Making six figures per trade, he also trains traders working in banks, fund management, and prop trading firms.

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EUR/USD Hovers Near 1.0850, Downside Seems Possible Due to Shift in Policies Outlook

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Written by:

Updated:

October 20, 2024
The EUR/USD pair is hovering near the 1.0850 level, as market sentiment remains cautious amid expectations of shifting monetary policies. Investors are bracing for potential downside pressure on the euro, driven by increasing divergence between the European Central Bank (ECB) and the Federal Reserve. Market analysts suggest that recent comments from ECB officials have dampened expectations for further aggressive rate hikes, signaling a more cautious approach to inflation control. Meanwhile, the Federal Reserve has maintained a hawkish stance, hinting at the possibility of additional tightening to curb inflation in the U.S. The growing gap in monetary policy outlooks is leading to a stronger U.S. dollar, which could push the EUR/USD lower in the coming days. With inflation data from both regions set to be released next week, traders are eyeing key economic indicators to gauge the next moves from central banks. Any significant divergence in inflation trends could amplify the pressure on the euro, particularly if the ECB holds back on raising rates while the Fed continues its tightening cycle. The currency pair's near-term performance will largely depend on how these policy shifts unfold. For now, EUR/USD remains stuck in a tight range, but the broader outlook suggests potential for further weakness if market expectations of U.S. economic resilience continue to drive dollar strength.
ezekiel chew asiaforexmentor

About Ezekiel Chew

Ezekiel Chew, founder and head of training at Asia Forex Mentor, is a renowned forex expert, frequently invited to speak at major industry events. Known for his deep market insights, Ezekiel is one of the top traders committed to supporting the trading community. Making six figures per trade, he also trains traders working in banks, fund management, and prop trading firms.

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