EUR/USD: Lagarde’s press conference expected – OCBC

A 25 basis point cut is probably a given. The implicit OIS has priced in consecutive cuts for the first half of next year, taking rates below 2% in June 2025, or even to 1.7% in July. The aggressive dovish valuation reflects a recession-driven rate cut cycle rather than policy normalization. Last at 1.0513 levels, note OCBC FX analysts Frances Cheung and Christopher Wong.

The Broader Price Pattern Shows an Inverted Head and Shoulders Pattern

“Nevertheless, we would pay more attention to Lagarde’s press conference for clues about how monetary policymakers assess the growth prospects. On German policy, Chancellor Scholz called for a vote of confidence yesterday and the Bundestag will vote next Monday, December 16. To survive the vote, Scholz would need to receive the support of an absolute majority of 367 votes. But if he fails, then Germany is likely to head to elections on. February 23, 2025.”

“The far-right AfD is calling for Germany to leave the European Union, the EUR and the Paris climate agreement as the party prepares for snap elections in February 2025. The concern here is the explicit language to leave the EU, unlike of its manifesto ahead of the European Parliament elections earlier in June 2024. Political risks in Europe, the risk of a dovish ECB and renewed RMB weakness may continue to weigh on the EUR, until we get some clarity. fell, dragged down by the decline in the RMB yesterday.”

“The daily momentum is slightly bullish but the RSI fell. Consolidation likely. The broader price pattern shows a classic formation of an inverted head and shoulders pattern, which is typically associated with a bullish reversal. The neck line is located at 1.0610/20 levels. A decisive break puts next resistance at 1.0670 (38.2% fibo), 1.0710 (50 DMA Support levels). 1.0460.