The EUR/USD pair has rebounded from 1.1100, supported by a weaker US Dollar (USD) and growing expectations for further Fed rate cuts. The Eurozone PMI data for September came in weaker than expected, indicating a potential slowdown in economic activity.
Fed Rate Expectations
The Federal Reserve (Fed) is expected to cut interest rates by 50 basis points (bps) in November, according to the CME Fedwatch tool. This expectation has increased following recent comments from Fed officials.
Economic Data
The US S&P Global PMI data for September showed a slight decline in manufacturing activity but growth in the services sector. Investors will also focus on the US Personal Consumption Expenditure (PCE) Price Index for August.
ECB Monetary Policy
The European Central Bank (ECB) is facing increased pressure to maintain a restrictive monetary policy stance due to persistent inflation. ECB officials have emphasized the need for more data before making any decisions on interest rates.
Technical Analysis
The EUR/USD pair has rebounded from the 20-day Exponential Moving Average (EMA), indicating a potential short-term uptrend. However, the 14-day Relative Strength Index (RSI) is declining, suggesting weakening momentum.
