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EUR/USD fell further into the bearish side on Tuesday, declining one-fifth of one percent and slipping below the 200-day Exponential Moving Average (EMA). Price action closed below the 1.0900 handle for the first time since early August. Fiber has now fallen nearly 3% from late September’s peaks just north of the 1.1200 handle.European banks broadly reported negative repercussions from the European Central Bank’s (ECB) summertime rate cut, with EU-area banks reporting that while credit standards have remain unchanged overall and actually eased for loans to households, consumer credit conditions remain tight. A rebound in housing loan demand is riding exclusively on anticipation of further rate cuts, implying consumers are over-borrowing in the near-term, while EU bank net interest income as a result of ECB policy rate decisions has turned negative for the first time since 2022.The ECB’s upcoming rate call on Thursday is broadly expected to be a quarter-point rate trim on the main deposit rate with markets widely forecasting a 25 bps rate cut, while the ECB main refi rate is expected to get trimmed by a similar 25 bps to 3.4% from 3.65%.Elsewhere on the Fiber data docket, US Retail Sales figures for September are slated for Thursday’s US market session. US Retail Sales are expected to rebound for the month of September, forecast to rise to 0.3% MoM from the previous 0.1%.
EUR/USD price forecast
EUR/USD has slid back below the 200-day EMA and lost hold of the 1.0900 handle. The pair has closed in the red for all but three of the last 12 consecutive trading days. Oversold warnings on the Moving Average Convergence-Divergence (MACD) implies that near-term short momentum on Fiber may have run its course, leaving the pair primed for a bullish rebound from the 200-day EMA.
EUR/USD daily chart
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