Eurusd Will Not Retest Resistance Anytime Soon

 Eurusd Will Not Retest Resistance Anytime Soon

EUR/USD Will Not Retest 1.10 Anytime Soon, According To SocGen

The Friday session was bullish for both the bond yields and the greenback, which has now diverted the attention towards the upcoming data releases.

It seems that the key focus of the market is now on which central bank will be the first one to make a move towards rate cuts. The initial messages from the Fed hinted at this outcome, but the NY Fed president quickly countered it.

No Talks Of Rate Cuts By ECB And Fed

On the ECB side, there is also no official announcement, as even the ECB officials believe that rate cuts are still not relevant in this environment.

As a result, the pressure has eased off a little from the central banks, but it doesn't mean a similar calm will be experienced in the bond markets.

Any downside in the EURO/USD will be countered by the fact that the possibility of fast rate cuts by the ECB against the Fed is already priced in. So unless some major changes occur, the EUR/USD is unlikely to revisit the 1.10 handle any time soon.

Now, the market faces several questions that will dictate where the EUR/USD is headed next. For starters, how will the Fed and the ECB view the lower unemployment numbers in regard to inflation? What about the possibility of more rates in 2024? Will the central banks will make 2-3 rate cuts in 2024?

The answer to all of these questions will be of great importance for the EUR/USD. Any comments or meetings from the relevant central banks will be closely watched to get these answers.

On the ECB side, it still remains to be seen whether the 2025 target of 2% inflation is achievable or not. Any hints about consistent inflation in the year 2024 could very well lead to several rate hikes once again. Similarly, the Fed could take the same action if inflation proves to be more sticky than initially.

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