EUR/USD | No interest rate cut and towards 1.11

The exchange rate between the Euro and the US Dollar remains consistently below 1.0900 on this Friday. A slight increase in the value of the US Dollar and yields on US Treasury bonds, in a context of general caution, is influencing the currency pair. Daily indicators are just beginning to highlight a negative direction, suggesting that the most likely path for the EUR/USD pair is downward, indicating that it's time to consider long positions. During the first European session on Friday, the EUR/USD exchange rate shows a subdued movement, remaining near the Wednesday low and extending for over a month, a region sensitive to the 0.62 Fib. The European Central Bank (ECB) is struggling to convey a clear message regarding the possibility of raising or lowering interest rates, which is preventing traders from taking directional positions on the common currency. Christine Lagarde, President of the ECB, has avoided countering bets for rate cuts exceeding 150 basis points this year but has emphasized the need for caution in the face of rising inflation in the Eurozone, reaching 2.9% YoY in December. Recent more cautious statements from various Federal Reserve officials have tempered expectations of an imminent interest rate cut. Meanwhile, the reduced likelihood of a more aggressive easing by the Federal Reserve has pushed yields on US 10-year Treasury bonds to their highest in over five weeks, providing some support to the US Dollar. In this context, markets are still considering a 50% chance of a Fed rate cut in March. This, along with stable performance in stock markets, limits the rise of the safe-haven US Dollar and provides some support to the EUR/USD pair. In the daily chart, it is evident that the price has reached the 62% Fibonacci zone and is now in a phase of a modest rebound, with expectations of an upward movement towards 1.11. It will be interesting to observe the Monday morning session in London to evaluate any bullish impulses and identify entry opportunities in what could be the most significant rally of the year. I wish everyone greetings and a pleasant weekend, from Nicola.