EUR/USD Subdued after Cautious ECB & Ahead of US Inflation
EUR/USD Analysis
Recent data and Fed communication have bolstered market bets for multiple rate cuts this year. Easing conditions in the labor market, cooling economy and more importantly a resumption of the disinflation trend strengthen the case for a pivot. Chair Powell and other officials seem to be laying the groundwork for a September cut, but will need more good data to gain confidence, so Friday's PCE inflation report will be crucial for their intentions, market expectations and the greenback.
The European Central Bank stood pat last week, after its historic rate cut in June that has brought at the forefront of the shift to less restrictive policies. Despite its leading work, there apprehension around more moves after some inflation persistence and President Lagarde did not commit to a path, saying that the question of September cut is "wide open". [1]
EUR/USD runs a profitable month to due to mounting anticipation of a Fed pivot, which brings 1.0981 in the spotlight. The monetary policy dynamics are murky though and sustained strength does not look easy.
The ECB may have adopted a cautious approach to further easing, but is still expected to move again and it is likely it will deliver more cuts this year than its US counterpart. EUR/USD ended its three-week profitable streak and is now vulnerable to the EMA200 (at around 1.0820). Daily closes below it would shift bias to the downside, but the June lows look distant for now (1.0665).
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 15 Apr 2026 https://www.ecb.europa.eu/press/press_conference/monetary-policy-statement/2024/html/ecb.is240718~6600b4add6.en.html |
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