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16.10.202408:35 Forex Analysis & Reviews: Hot Forecast on EUR/USD from 16.10.2024

Relevance up to 13:00 UTC--4
This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

It was initially expected that the rate of decline in industrial production in the eurozone would slow from -2.2% to -1.0%, but the decline was replaced by growth of 0.1%. Moreover, previous data was revised upward to -2.1%. The situation in the eurozone's industrial sector was much better than anticipated. Nevertheless, no correction occurred in the currency market. The dollar continued to rise, although the scale of its growth was merely symbolic.

The market's behavior seems strange unless we consider the upcoming ECB board meeting. A month and a half ago, the ECB cut the refinancing rate from 4.25% to 3.65%, and after such a significant easing of monetary policy, everyone was confident that interest rates would remain unchanged for the rest of the year. However, at the beginning of this week, rumors started circulating that the ECB might cut the refinancing rate by another 25 basis points—possibly as soon as this Thursday. This is particularly suggested by inflation, which continues to decline steadily. And indeed, on Thursday, the final inflation data will be published, which should confirm this assumption.

Thus, the strong industrial production data supported the euro, preventing it from weakening further. Today, the macroeconomic calendar is nearly empty, and the market will likely consolidate around current levels. Ahead of significant events such as the ECB board meeting and the release of inflation data in the eurozone, few will be willing to take major risks.

Dean Leo
Analytical expert of InstaForex
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