EUR/USD: Euro Holds Steady Before Key Inflation Data, ECB Rate Cut Expectations Pared Back

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The EUR/USD currency pair is trading around 1.0850, consolidating ahead of the release of inflation data from both the Eurozone and the US later this week.

Market Dynamics:

  • ECB Policymakers Cautious: Recent pronouncements from ECB officials suggest a more cautious approach to further rate cuts beyond the one expected in June. This has tempered expectations of aggressive easing.
  • Inflation Concerns: Persisting inflationary pressures, evident in wage growth data and preliminary PMI figures, are prompting the ECB to take a more measured approach.

Technical Analysis (EUR/USD):

  • Symmetrical Triangle Breakout: The EUR/USD has maintained its position above the support level after breaking out of a bullish Symmetrical Triangle pattern on the daily chart.
  • EMA Support: The pair is currently trading above all its short-term and long-term Exponential Moving Averages (EMAs), indicating underlying bullish momentum.
  • RSI Neutral: The 14-period Relative Strength Index (RSI) is in neutral territory, suggesting a pause in the upward momentum.

Possible Scenarios:

  • Upside Potential: A break above the two-month high around 1.0900 could pave the way for a test of the March high (1.0950) and the psychological resistance level of 1.1000.
  • Downside Risk: A decline below the 200-day EMA (1.0800) could signal a potential reversal.

Key Event:

  • Eurozone and US Inflation Reports: The upcoming inflation data releases on Friday will be crucial for gauging the future direction of the EUR/USD and potentially influencing ECB policy decisions.


The EUR/USD is currently in a wait-and-see mode, with the immediate direction likely dependent on the upcoming inflation data. The ECB’s stance on further rate cuts and the overall economic outlook in the Eurozone will also be important factors to watch.


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