EUR/USD advances toward 1.1550 as investors await the ECB’s upcoming monetary policy decision. Expectations that the central bank could tighten policy further to address persistent inflation pressures are lending support to the euro. Meanwhile, escalating tensions in the Middle East are boosting safe-haven demand for the US Dollar, which may limit the pair’s upside potential.
The EUR/USD pair edges higher toward the 1.1550 level during Thursday’s Asian session as traders position themselves ahead of the European Central Bank’s (ECB) policy decision scheduled for 12:15 GMT.
Market participants widely expect the ECB to raise its Deposit Facility Rate by 25 basis points to 2.25%, aiming to address mounting inflationary pressures fueled by elevated energy costs. Such a move would mark the central bank’s first policy adjustment after eight consecutive meetings without changes.
Recent comments from several ECB policymakers have reinforced expectations of tighter monetary policy, with officials highlighting growing upside risks to inflation stemming from ongoing energy supply disruptions. Investors will closely scrutinize remarks from ECB President Christine Lagarde for clues on whether inflationary pressures could generate broader second-round effects across the Eurozone economy.
Meanwhile, the US Dollar has recovered part of its earlier losses as concerns mount that the fragile ceasefire between Iran and the United States could unravel following renewed military exchanges. Despite the rebound, the US Dollar Index (DXY) remains modestly lower on the day, trading around 99.97 at the time of writing.
Technical Analysis
EUR/USD is trading slightly higher near 1.1550 at the time of writing, but the broader technical outlook remains bearish following a breakdown from a Symmetrical Triangle pattern and the presence of a downward-sloping 20-period Exponential Moving Average (EMA), currently positioned at 1.1603.
Momentum indicators also point to persistent downside risks. The Relative Strength Index (RSI) remains below the 40.00 threshold, signaling renewed selling pressure while still staying comfortably above oversold territory.
On the upside, immediate resistance is seen at the 20-period EMA near 1.1603. Additional barriers emerge at 1.1623, where a previously supportive ascending trend line has turned into resistance, followed by a stronger descending trend-line resistance around 1.1707. On the downside, a break below the June 8 low near 1.1500 could accelerate losses toward the March 16 low at 1.1411.
THE ETERNAL SOVEREIGN 
Leave a comment