EUR/USD Forecast - Prices, Charts, and Analysis

• ECB leaves rates unchanged as expected.
• EUR/USD heading towards 1.0500.

The ECB left all three of its key interest rates unchanged today and noted that while inflation is expected to ‘stay too high for too long’, inflation dropped markedly in September due to strong base effects. The central bank added that ‘The Governing Council’s past interest rate increases continue to be transmitted forcefully into financing conditions. This is increasingly dampening demand and thereby helps push down inflation.’ ECB President Lagarde’s commentary at the upcoming press conference may give traders a clearer view of the thinking behind the central bank’s decision.

Financial markets had no change in interest rates fully priced-in earlier today with rate cuts being seen between the end of Q1 and the start of Q2 2024 and there is little in today’s decision to change the market’s view.

EUR/USD continues to drift lower and is eyeing a break below the 1.0516 and 1.0500 levels. Recent weakness in the pair has been fueled by a stronger US dollar and upcoming US data may push the pair lower.

EUR/USD Daily Price Chart – October 26, 2023

All Charts via TradingView

IG Retail trader data shows 68.74% of traders are net-long with the ratio of traders long to short at 2.20 to 1.The number of traders net-long is 0.82% higher than yesterday and 2.29% higher than last week, while the number of traders net-short is 5.68% lower than yesterday and 15.02% lower than last week.

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https://www.dailyfx.com/news/euro-eur-latest-ecb-leaves-interest-rates-unchanged-eur-usd-slips-lower-20231026.html