- ECB Rate Cut Likely: Despite recent modest growth in the euro zone, markets are nearly fully pricing in an ECB rate cut set for Friday, with less than a day until the decision.
- EUR/USD Under Pressure: The EUR/USD has dropped to its lowest level since August 2, falling below key exponential moving averages.
The euro zone economy flashed modest signs of life earlier this week, with a series of indicators suggesting tepid but still growing activity for a region that has narrowly avoided recession for over a year.
However, the numbers are possibly unlikely to deter the European Central Bank from moving forward with a rate cut on Friday, a decision that markets have nearly fully priced in as the countdown enters its final 24 hours.
Ahead of the decision, the EUR/USD is trading at its lowest since August 2, breaking below its 20-, 50-, 100-, and 200-day exponential moving averages. The key question: will the ECB’s rate cut provide much-needed support to the euro, or will sellers attempt to erase the gains from the August 2nd rally?
