The Euro (EUR) staged a comeback against the US Dollar (USD) on Thursday, clawing back from two days of losses. This upswing comes despite ongoing expectations of the European Central Bank (ECB) cutting interest rates in June.
- ECB Rate Cuts on Horizon: Market participants anticipate the ECB will initiate a series of rate cuts starting in June, with some pricing in three reductions this year. This outlook is fueled by a recent decline in Eurozone inflation.
- ECB Policymaker Expresses Caution: While most ECB officials seem aligned on lowering rates, Robert Holzmann, Governor of Austria’s central bank, dissented, arguing against a hasty or aggressive rate cut approach.
Technical Analysis: EUR/USD Bounces Off Support
- EUR/USD halted its slide on Thursday, finding support near its 20-day EMA (Exponential Moving Average) at 1.0732, indicating a potentially bullish short-term outlook.
- The Symmetrical Triangle pattern on the daily chart remains in play, suggesting a potential breakout in either direction once volatility subsides.
- The RSI (Relative Strength Index) hovering around 50 reflects ongoing market indecision.
The Euro’s near-term trajectory hinges on the ECB’s monetary policy actions, future inflation data, and broader market sentiment.