EUR/USD: BofA’s Expectations for This Week

EUR/USD: BofA’s Expectations for This Week

BofA expects the European Central Bank to announce a 25-basis point rate cut in this week’s decision, in line with market consensus. The bank anticipates a slight dovish shift in the ECB’s forward guidance, which could weigh on the euro and push it towards a retest of the critical 1.1000 level in EUR/USD.

Bank of America (BofA) is in line with market expectations, predicting that the European Central Bank (ECB) will announce a 25-basis point rate cut in its decision this week.

BofA also foresees a modest downside risk for the EUR, driven by a potential dovish shift in the ECB’s forward guidance.

In the EUR/USD, recent price action saw lower lows and lower highs on the four-hour chart, hinting at a possible bearish reversal and signaling the end of the bullish trend.

An important question: What might happen at the next test of the 1.1000 level? This level was a key battleground for the pair in 2023.