empty
11.10.2023 03:00 PM
EUR/USD: Continuation of correction or new wave of decline?

This image is no longer relevant

After a 5-day strengthening streak, the EUR/USD pair has slowed its ascent today, trading near the 1.0600 level as of writing.

Market participants prefer not to engage in significant trading activities and exercise caution in the lead-up to important publications. Additionally, on Thursday (at 11:30 GMT), the ECB will release a report containing information about the September meeting of the Bank's Governing Council.

This document also provides an overview of the current ECB policy with planned changes in the financial and monetary spheres. As known, following the September meeting, the European Central Bank announced a 25-basis-point increase in key rates, bringing them to 4.50% for main refinancing operations and 4.75% for the marginal lending facility. The accompanying statement from the meeting mentioned that the "Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target."

Investors will closely examine the minutes from this ECB meeting to catch additional signals regarding future monetary policy.

Moreover, yesterday, the International Monetary Fund downgraded its economic growth forecasts for the Eurozone. This year, it could be 0.7% (down from the previous expectation of 0.9%), and next year, 1.2% (versus the previous forecast of 1.5%), with the possibility of a recession.

However, from the perspective of ECB officials, there have been quite hawkish statements regarding the prospects of further tightening monetary policy. For instance, the head of the Bank of France, Francois Villeroy de Galhau, recently noted that inflation in the Eurozone needs to decrease to the target level of 2.0%. Also, a member of the ECB's Governing Council, Klaas Knot, stated on Wednesday that "inflation is still too high," and the bank is "prepared for further rate adjustments if disinflation persists."

Therefore, the dynamics of the EUR/USD pair at the moment are influenced by both the dollar and the euro. It is also important not to overlook the role of the dollar as a safe-haven asset. Given the complex geopolitical situation in the world and the new hotspot of tension in the Middle East, investor attention to the role of the safe-haven dollar may again shift after the publication of all the aforementioned documents and macroeconomic indicators.

This image is no longer relevant

From a technical perspective, EUR/USD continues to trade within the medium-term and long-term bearish markets, below the key resistance levels of 1.0760 and 1.1040, respectively. In our previous review, we noted that after breaking the resistance level of 1.0542, if the upward correction continues, targets at the levels of 1.0633 and 1.0676 may be reasonable when planning your trading strategy. As we can see, the first target is almost reached, with only 5 points remaining to reach it. A break of today's low at 1.0593 could be the first signal to resume short positions.

Jurij Tolin,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The ECB May Cut Interest Rates Twice

The euro is showing a sharp rally against the U.S. dollar. The EUR/USD pair has already reached a three-year high and shows no signs of slowing down. Meanwhile, according

Jakub Novak 12:42 2025-04-11 UTC+2

AUD/USD. Analysis and Forecast

The AUD/USD pair is attempting to attract buyers in its rebound from the psychological level of 0.5900, marking its lowest point since March 2020. The upward momentum has managed

Irina Yanina 12:39 2025-04-11 UTC+2

Markets Face a Prolonged Period of Instability (USD/JPY and USD/CHF Likely to Continue Falling)

On Thursday, investors realized there is currently no such thing as stability. High market volatility remains and will continue to dominate for some time. The ongoing cause of this remains

Pati Gani 09:11 2025-04-11 UTC+2

The Market Has Grown Used to Chaos

What is life if not a game? In past years, investors focused on the standoff between the Federal Reserve and financial markets. But in 2025, the rules of the game

Marek Petkovich 08:42 2025-04-11 UTC+2

What to Pay Attention to on April 11? A Breakdown of Fundamental Events for Beginners

A relatively large number of macroeconomic events are scheduled for Friday, but none are expected to impact the market. Of course, we may see short-term reactions to individual reports

Paolo Greco 06:04 2025-04-11 UTC+2

GBP/USD Overview. April 11: The Market Didn't Believe Trump

The GBP/USD currency pair also traded higher on Thursday. As a reminder, macroeconomic and traditional fundamental factors currently have little to no influence on currency movements. The only thing that

Paolo Greco 03:28 2025-04-11 UTC+2

EUR/USD Overview. April 11: The American Comedy Continues

The EUR/USD currency pair declined sharply overnight on Wednesday but showed some recovery during the day. On Thursday, there was further growth—this series of fluctuations can only be described

Paolo Greco 03:28 2025-04-11 UTC+2

Trading Recommendations and Analysis for GBP/USD on April 11: The Dollar Takes a Double Hit

The GBP/USD currency pair also showed strong growth on Thursday, although not as strong as the EUR/USD pair. The pound gained only around 200 pips—which isn't a considerable move under

Paolo Greco 03:28 2025-04-11 UTC+2

EUR/USD. A Message from the Past: U.S. CPI Report Fails to Support the Dollar

The CPI report released on Thursday showed weaker-than-expected inflation. The market responded accordingly: the U.S. dollar came under renewed pressure (the U.S. Dollar Index fell into the 100.00 range)

Irina Manzenko 00:47 2025-04-11 UTC+2

The Euro Charges Ahead. Opponents Retreat

A rally in European stock indices, slowing U.S. inflation, and the fact that the average U.S. tariff has not changed significantly despite the 90-day deferral all contributed to the rise

Marek Petkovich 00:47 2025-04-11 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.