Eurusd Consolidates With No Upside

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Eurusd Consolidates With No Upside

Eur/Usd Consolidates Under 1.0700, Upside Remains Capped

It appears that the EUR/USD is trading near the 1.0600 - 1.0605 support area for now. According to experts, the EUR/USD will likely remain trading sideways in the short term.

As for chances of any upside, it will likely remain capped as long as the pair is trading under the 1.0690 - 1.0700 resistance zone. That's why it is safe to say that the EUR/USD will likely end the weak with very little change.

Eur/Usd Ended Previous Week With -1.8% Change

In the previous week, the EUR/USD ended up with a loss of 1.8%, which means the recent week wasn't so bad after all. Amidst all of this, the USD is also a little bit soft, which is one reason why the EUR/USD has copied the price action of the previous week.

The bigger picture that's impacting the EUR/USD is the policy divergence between the Fed and the ECB. So, over the long run, the policy divergence will be the key catalyst for the EUR/USD.

The recent data from the US side has also reaffirmed the view that there is very little to no chance of landing. That's why the chance of a hawkish stance from the Fed is now gaining traction.

Earlier, the Fed president from Chicago talked about how the inflation situation has stalled. In simple words, it will likely take more time than what the market was expecting for inflation to reach the 2% target. After these comments, the USD showed a moderate upside, as it hints that the current rates are here to stay for now.

Conversely, the ECB president has given hints about a June rate cut which was not received well by the EUR bulls. According to experts, the comments from Lagarde have put the ECB in a rather tight spot of moving before the Federal Reserve.

In short, the ECB will likely go ahead with a rate cut a lot sooner than the Federal Reserve. This will put the EUR/USD under pressure in the next few months.

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