The ECB remains unsure about the eurozone's economic recovery.

The euro weakened slightly as investors awaited the European Central Bank (ECB)'s interest rate decision. Investors expect the ECB to keep rates unchanged today after cutting them in June. They are also waiting for other economic data that could help predict future ECB rate cuts.

If the ECB decides to maintain current rates at its July meeting, the refinancing rate is expected to stay at 4.25%, the deposit rate at 3.75%, and the minimum lending rate at 4.5%. Additionally, policymakers are unlikely to mention a clear schedule for rate cuts, hesitant to cut rates further until they are more confident that inflation will reach the 2% target by 2025. Analysts expect the ECB to cut rates at least two more times this year. In the US, it is expected that the Federal Reserve will start cutting rates in September, with two more cuts by the end of the year, as Fed Chairman Jerome Powell is confident that inflation will return to target.

ECB policymakers have clarified that the rate cut in June was not part of a continuous rate-cutting process. They are still waiting for other economic data to provide assurance that the eurozone economy can recover well. Policymakers have expressed uncertainty about the eurozone's economic recovery, citing insufficient data on the recovery in private consumption.

The euro area had a trade surplus of 13.9 billion euros in May 2024, below the market forecast of 18 billion euros. Imports fell sharply by 6.4% to 227.6 billion euros, driven by a clear slowdown in demand from both the private sector and households due to higher financial costs and a need to cut expenses as much as possible. Meanwhile, exports fell only 0.5% to 241.5 billion euros, indicating only a slight slowdown in foreign demand. Sales of machinery and vehicles declined, contrary to the increase in chemical sales, resulting in a slight decrease in exports.

Retail sales in the euro area increased by 0.1% month-on-month in May, slightly recovering after a 0.2% decline, indicating that household spending remains sluggish. This has led to slight declines in sales across several sectors, despite a renewed increase in energy demand.

Techical analysis data (5H)

Resistance: 0.9154, 0.9158, 0.9164

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.9138 - 0.9144 but cannot break the support at 0.9144, you may set a TP at approximately 0.9158 and SL at around 0.9134 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.9154 - 0.9158, you may set a TP at approximately 0.9164 and SL at around 0.9138 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.9154 - 0.9158 but cannot break the resistance at 0.9154, you may set a TP at approximately 0.9138 and SL at around 0.9164 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.9138 - 0.9144, you may set a TP at approximately 0.9134 and SL at around 0.9158 or according to your acceptable risk.

Pivot point July 18, 2024 07:32 PM. GMT+7