EUR/USD Rebounds After ECB Rate Cut
EUR/USD Analysis
The European Central Bank lowered rates for second time after the June pivot, but maintained a non-committal stance. GDP forecasts were downgraded, but only marginally not offering a compelling reason to accelerate the easing pace. Headline inflation has decelerated to the lowest in three years and forecasts were maintained, although core was revised higher. [1]
On the other side of the Atlantic, the Fed is set to join the monetary easing trend in order to prevent further weakening of the labor market, as disinflation is on track. The latest CPI release showed persistence in core readings though. This raises the bar for a larger 50 bps starting cut, but the debate is not settled. Markets are split and in any case anticipate aggressive easing ahead.
ECB President Lagarde appeared content with the quarterly cadence of cuts and did not provide any hints of an October move, so the Euro strengthened. At the same time the greenback weakened, for a firming up in pricing around an outsized Fed pivot.
EUR/USD rose as a result, after defending pivotal support cluster. This provides the basis for higher (1.1202), but further advance beyond 1.1276 looks hard under current conditions. ECB is ahead and rates are much lower. Aggressive pricing around the fed appears stretched and also leaves room for disappointment. A breach of 1.1000 remains in play, although bigger losses into the daily Ichimoku Cloud would need strong catalyst.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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| Retrieved 17 May 2026 https://www.ecb.europa.eu/press/pr/date/2024/html/ecb.mp240912~67cb23badb.en.html |
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