EUR/USD remains stuck near 10-week low as ECB cuts rates by 25 bps to 3.25% – FXStreet

• The EUR/USD pair remains vulnerable at around 1.0850 as the ECB lowered deposit facility interest rates by 25bps to 3.25%.
• The ECB is expected to cut its key borrowing rate by 25 basis points again in December.
• The dollar strengthened as speculation that Trump would win increased.

EUR/USD remained under pressure around 1.0850 on Thursday. The European Central Bank (ECB) lowered the deposit system interest rate by 25 basis points (bps) to 3.25%, leaving major currency pairs in a weak position. This is the second consecutive 25bps interest rate cut by the ECB.

The ECB's dovish decision was widely expected as the eurozone economy is in a slowdown and price pressures appear to be under control. According to revised forecasts, the Eurozone Harmonized Index of Consumer Prices (HICP) slowed to 1.7% in September, higher than the forecast and preliminary estimate of 1.8%. The country is expected to end the year with overall output down 0.2%, according to the latest economic forecasts from Germany's Economy Ministry.

Investors will now pay close attention to ECB President Christine Lagarde's press conference for any new clues about expected monetary policy actions in December.

Traders already expect the ECB to cut borrowing rates by another 49 basis points (bp) in its two remaining meetings this year, with two 25-bp rate cuts on Thursday and later this year, according to a Citi note on Tuesday. It suggests possibility. December.

Daily Digest Market Trends: EUR/USD Extends 4 Consecutive Days of Decline

• EUR/USD extended its four-day losing streak on Thursday. The US dollar (USD) has performed well over the past few weeks, causing the major currency pair to drop to its lowest in more than 10 weeks around 1.0850. The US Dollar Index (DXY), which measures the value of the US dollar against six major currencies, rose to around 103.60, its highest level in more than two months.
• The U.S. dollar weakened as traders priced in expectations that the Federal Reserve will continue to cut interest rates sharply and that former U.S. President Donald Trump is expected to win the November 5 presidential election. It is trending steadily.
• Market participants expect the Fed to moderate interest rate cuts later this year as concerns about a slowdown in the U.S. economy recede due to solid growth in nonfarm payrolls (NFP) and the Services Purchasing Managers Index (PMI). I predict that will happen. This is data for September.
• Meanwhile, Trump's victory over Democratic Vice President Kamala Harris will result in higher tariffs, tax cuts and easing of financial conditions on imports from his Asian and European peers, which will favor the US dollar. It is expected.
• On the economic front, investors will focus on September US monthly retail sales data, which will be released at 12:30 GMT. Economists expect retail sales to rise 0.3%.

Technical analysis: EUR/USD looks set for further weakness towards 1.0800

EUR/USD fell to around 1.0850 in early North American trading. The major currency pair extended its decline after falling below its 200-day exponential moving average (EMA), which traded around 1.0900 earlier this week.

The downside movement in the common currency pair began after the daily double top formation broke around the September 11 low of 1.1000, resulting in a bearish reversal.

The 14-day Relative Strength Index (RSI) is below 30.00, indicating strong bearish momentum.

On the downside, the measure could find support near the round level reading at 1.0800 and the upward trend line at 1.0750, which is plotted from the October 3rd low of around 1.0450. Meanwhile, the 200-day EMA and the psychological reading at 1.1000 will be the key resistance levels for the pair.