European Shares Downturn As Monetary Policy Outlook Evaluated

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  • European shares dip as investors assess economic data and global monetary policy outlook.
  • ECB signals further interest rate hikes to address inflation, while the Fed considers pausing the tightening cycle.
  • Germany sees an unexpected decline in factory orders, the Netherlands experiences a higher inflation rate.
  • UK retail sales growth slows due to soaring food prices.
  • Australia’s central bank raises interest rates to 11-year high, hints at possible additional measures.
  • Euro trades near a two-month low as inflationary pressure eases in Eurozone.
  • Germany’s 10-year government bond yield rebounds amid inflation concerns.
  • The market anticipates ECB to raise rates to around 3.75% later this year.
  • Expectations of 25 basis point rate hikes in the coming months.
  • ECB emphasizes elevated Eurozone inflation, signaling the need for further monetary tightening.

Market Update on the EUR/USD:

Median-Term Bias: The EUR/USD exhibits a bullish bias, supported by a slightly lower dollar for the month and negative volatility. Investors interpreted this as a buying signal, especially with the Federal Reserve expected to pause its rate hikes while the ECB continues to raise interest rates, narrowing the rate gap and potentially bolstering the euro.

Median View on Rate: The rate shows a balanced range, inviting investors to consider rotational scenarios. Currently, the market tests the lower extreme, providing opportunities for absorption and the potential buildup of larger long positions.

Daily Interval: The rate forms a micro-balanced price range, with a focus on the lower extreme and buying tails. Traders perceive this as supportive, although caution is advised regarding buyers targeting swing lows to establish core positions.

3 Months Ago

Short-Term Perspective: In the current session, the euro experienced a 0.1% decline against the dollar. The market may target yesterday’s swing lows, which could provide support during the New York trading session.

Please note that currency market dynamics can change rapidly, and it’s essential to stay updated on the latest developments.

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