Ella 
The Euro (EUR) has started the new trading week on a positive note against the U.S Dollar (USD), allowing the EUR/USD (EUR/USD) to extend its rebound from around 1.0500 and back towards the 1.0540 area so far on Monday.
Meanwhile, the US Dollar Index (DXY) has retreated from last week’s peak near 106.80 on the back of improving risk-on market conditions and the Fed’s “longer-term monetary tightening” stance, which appears to remain unchanged for now.
Monetary policy remains in focus, with investors now expecting the Federal Reserve (Fed) to maintain a “no change” stance on interest rates for the remainder of the year. At the same time, financial market participants are also pondering the possibility that the European Central Bank (ECB) will stop adjusting its policy, even though inflation has exceeded the bank’s target and concerns are growing that the European region could experience a recession or stagflation in the future. .
On the other hand, the speculative community continued to reduce net long positions in the week ending October 10th, this time to levels seen at the end of October 2022, as market participants continue to price in the possibility that the ECB’s rate hike cycle may have peaked, and the continued view that the Fed may maintain its restrictive stance for longer than originally expected.
