March has been a tumultuous month for the EUR/USD exchange rate, with sellers dominating the market and causing a steady decline. But the tides may be turning as the 50 daily SMA emerges as a formidable support for the struggling EUR.
EUR/USD Chart Weekly – The 50 SMA Is Still Holding
Over the past decade, the once mighty EUR/USD has been on a downward spiral, with each high lower than the last. But just when all hope seemed lost, a glimmer of optimism emerged in October 2022.
Despite falling below parity earlier that year, the lows have been steadily rising, signaling a potential shift in the market. However, the 50 SMA (yellow) has been a formidable force, propping up the currency pair since November of the previous year and preventing it from plummeting further.
Exciting news awaits as we anticipate a potential break in the market, paving the way for a climb to 1.05 with the 100 SMA (green) as our target. The ECB is rumored to implement a rate cut policy, potentially dropping interest rates to 2.25% by the end of 2024. Speculations are rife that both the FED and ECB will initiate interest rate cuts in June.
Get ready for a financial shake-up as Goldman Sachs predicts a bold move from both the Federal Reserve and the European Central Bank. Brace yourself for a series of rate cuts from the Fed, set to kick off in June 2024, while the ECB takes a more gradual approach to reducing its policy rate over the same time frame.
The current federal funds rate, hovering between 5.25-5.5%, is expected to hold steady until June. But brace yourself, because a thrilling twist is on the horizon: a 25 basis point cut in internet rates is predicted during the June, September, and December meetings. And that’s just the beginning. Hold onto your hats as we anticipate four more cuts next year, with a final drop in 2026 that will bring rates down to an exciting 3.50%.
The upcoming May FOMC meeting will bring a major change to the Treasury runoff cap. Brace yourselves, because the cap is set to be slashed in half from $60 billion to just $30 billion per month. And that’s not all – across the pond, the European Central Bank has announced a steady stance, with their policy rate expected to remain at 4.00% until June. But hold on to your hats, because after that, they have a series of 25 basis point reductions planned for every meeting, gradually bringing the rate down to 2.25%. This means a total of seven cuts, with five happening in 2024 and two more in 2025.