EUR/USD Rebounds on USD Weakness, Short-Term Downtrend Remains
EUR/USD trades higher at the start of the week, in the lower 1.0800s, due to broad US Dollar (USD) selling and potential profit-taking after last week's decline.
Key Factors:
- PBoC Fix: China's higher Renminbi fixing weakens the USD.
- US Exceptionalism: Recent strong US economic data suggests a slower pace of Fed rate cuts, potentially supporting the USD.
- SNB Impact: The Swiss National Bank's surprise rate cut increases scrutiny on the ECB, potentially impacting the Euro (EUR).
Technical Outlook:
- Downtrend Intact: EUR/USD remains below the 200-day SMA (1.0838), indicating a short-term downtrend.
- Key Support: The low of wave B of the Measured Move pattern near 1.0795 offers potential support. A decisive break below could signal further decline towards 1.0750 or even 1.0700.
- Bullish Case: A break above 1.0950 would bring the current downtrend into question.
Additional Factors:
- ECB Comments: Dovish remarks from ECB officials increase the likelihood of an early rate cut, weighing on the EUR.
- US Data and Fed Speakers: US New Home Sales, the Chicago Fed National Activity Index, and speeches by Fed officials could influence market sentiment.