EUR/USD Continues Decline Amid Data Releases and C.Bank Outlooks

EUR/USD Extends Decline as Data Releases and Central Bank Outlooks Influence Market Sentiment

In the Eurozone, New Car Registrations witnessed a notable increase of 17.2% in the year up to April, indicating positive growth in the automotive sector. Additionally, final inflation figures for April in the broader Euroland are eagerly awaited later in the morning, which will provide further insights into the region's economic performance.

Turning our attention to the US, the release of weekly Mortgage Applications will take the spotlight, followed by Housing Starts and Building Permits data. These indicators will shed light on the health of the US housing market and its potential impact on the broader economy.

As EUR/USD continues its decline, approaching the key support level of 1.0800 on Wednesday, market participants are closely monitoring the dynamics between the euro and the US dollar. The euro's value is expected to be influenced by the actions and statements of the Federal Reserve and the European Central Bank (ECB) regarding their respective monetary policy plans, particularly related to interest rate adjustments.

While the ECB has maintained a hawkish stance, suggesting the possibility of further rate hikes, there are concerns about the loss of momentum in economic fundamentals in the region. This creates a juxtaposition between the ECB's outlook and the current economic conditions.

Key events to watch in the Eurozone this week include the release of the EMU Final Inflation Rate on Wednesday, which will provide crucial information on price stability within the euro area.

Important factors lingering in the background include the continuation of the ECB's hiking cycle in June and July (with a possibility of September), the impact of the ongoing Russia-Ukraine conflict on growth prospects and inflation outlook in the region, as well as the risks of inflation becoming entrenched.

These developments will shape the outlook for the euro and influence the trajectory of EUR/USD in the coming days.

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