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EUR/USD rebounded on Monday, climbing off recent lows around 1.0782 but remaining below the 200-day Simple Moving Average (SMA) at 1.0809.
Picture: EURUSD shows consolidation around 1.0809, awaiting breakout signals for potential trend direction, as seen on the VT Markets app.
The Moving Averages (MA) suggest minimal momentum in either direction in the short term.
Given the lack of significant movement, traders might consider looking for any breakout or breakdown from the current narrow range, as it could signal the beginning of a trend.
The dollar’s rally coincides with gains in US yields across various maturities, contrasting with declining German bund yields.
The recent dip in bund yields may indicate that the Eurozone is set to face some uncertainty. The upcoming U.S. presidential election adds further complexity to EUR/USD.
As markets assess each candidate’s fiscal and trade policies, the dollar’s role as a safe-haven currency often strengthens with increased election-driven volatility.
See also: Week Ahead: Brace for Trump-Harris Showdown
Analysts anticipate that the Fed, with a 98% probability of a 25-basis-point cut next month, may pause further easing if robust data continues, while the European Central Bank’s (ECB) stance remains split.
European inflation and GDP data could push the ECB towards additional easing in the coming months, a move supported by signs of economic stagnation and cautious ECB commentary.
As both sides of the Atlantic contend with economic uncertainty, the Greenback may retain support in the near to medium term, particularly if the U.S. election outcome reinforces market confidence in existing policies.
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