No major events are expected today.

The EUR/USD pair is trading near the 1.0550 mark during Monday’s Asian session, close to the annual low of 1.0496 reached on November 14. Downside risks for the pair have increased following cautious comments from Federal Reserve (Fed) officials and stronger-than-expected US retail sales data, which broadly supported the US Dollar (USD).

Last week, Fed Chair Jerome Powell tempered expectations for an imminent rate cut, emphasizing the resilience of the economy, a strong labor market, and persistent inflationary pressures. Powell stated, “The economy shows no signs that we need to rush to cut rates.”

The CME FedWatch Tool indicates that markets are pricing in nearly a 60% probability of a 25-basis-point Fed rate cut at the December meeting. The Euro remains under downward pressure as the European Central Bank (ECB) maintains a dovish stance, with a rate cut expected at the upcoming December meeting. Core inflation in the Eurozone is forecasted to drop sharply to 2.4% in 2024 from 5.4% in 2023, gradually decreasing to 2.1% in 2025 and 1.9% in 2026.

The European Commission’s autumn forecast for 2024 projects Eurozone economic growth at 0.8%, unchanged from its spring forecast. However, growth for 2025 has been slightly revised downward to 1.3% from 1.4%, with 2026 growth projected at 1.6%.

Recommendations: Primarily trade with Sell orders at the current price levels.