EUR/USD: Moderate consolidation is on the roll – OCBC

The Euro (EUR) traded a touch softer, but range remains subdued, OCBC FX strategists Frances Cheung and Christopher Wong note.

ECB may lower rate again on September 12

“Pair was last seen at 1.1055 levels. Daily momentum is mild bearish while RSI was flat. Support at 1.1026 (recent low), 1.10, 1.0930 (61.8% fibo retracement of 2024 high to low). Resistance at 1.12 (recent high) and 1.1280 (2023 high).”

“Slippage in CPIs out of Euro-area, Germany and Spain and softer mfg PMI print added to expectation that ECB may lower rate again at its upcoming meeting on September 12. Markets have priced in 25bp cut at this meeting and about 36bp cut for remainder of the year (another 1.5 cut).”

“This week, focus is on services PMI, PPI (Wednesday), retail sales (Thursday) and GDP (Friday). Another series of underwhelming data print could move the needle for markets to price in a more dovish ECB and for the EUR to trade lower”.