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This not only gives the ECB even more reason to maintain policy, but also draws into the argument that interest rate cuts could happen sooner or later in the euro area. A hard landing appears to be avoidable for now, especially as the economy tends to soften towards the end of the year.
EUR/USD daily chart
EUR/USD is currently down 0.2% at 1.0946, and the pullback from 1.1000 appears to be gradually accelerating. Digging down to the short-term chart, the pair has fallen below the 100-hour moving average at 1.0958 and is now threatening to push towards the 200-hour moving average at 1.0938.
A break below the latter will likely see sellers regain short-term control and regain the momentum to correct the price after the rejection at the 1.1000 mark.
Elsewhere, the euro is also struggling against the pound, with EUR/GBP currently down 0.2% to 0.8627, below its 100-day moving average of 0.8637.
At this stage, it looks like the ECB will be going head-to-head with the Fed over who will be the first to cut interest rates next year, at least in terms of market pricing.
