EUR/USD - Eurozone CPI falls below 2%, and ECB cuts further by 25bp - 10/18/2024 (GMT)

<Fundamental>
The Eurozone CPI significantly undershot market expectations, prompting the ECB to implement additional rate cuts. In Sep, Eurozone CPI stood at 1.7%, falling short of the projected 1.8% and decelerating by 0.5% from the previous month's 2.2%. This marks the first instance in 40 months that Eurozone CPI has dipped below 2% since Jun 2021.

The ECB has implemented an additional 0.25% rate cut due to slowing economic growth and falling inflation. The ECB stated that the deflation process is proceeding smoothly and anticipates gradually easing labor cost pressures. ECB President Lagarde emphasized that future rate direction in December will be contingent on upcoming economic data.

<Technical>
EURUSD is still in a downtrend, falling to 1.0830. The gap between both EMAs widened, and the price broke the 1.0830 threshold, sending out a bearish signal. If EURUSD continues its downtrend within the descending channel and breaks the support at 1.0780, the price may fall further to 1.0670. Conversely, if EURUSD breaches both EMAs and the channel’s upper bound, the price could gain upward momentum to 1.0940.