EUR/USD Stays Put Around 1.1350 as Market Prepares for ECB Interest Rate Decision and Fed Inflation War
The EUR/USD currency pair stays put around the 1.1350 level as the US Dollar tries to regain stability as stagflation fears increase and as market sentiment turns defensive. Market participants are watching remarks from Federal Reserve officials, such as Atlanta Fed President Raphael Bostic, who noted the long way that will have to go to achieve the central bank’s 2% inflation target — a sign that rate decreases will not come as early as some had anticipated. In the meantime, everyone is focused on the next policy meeting of the European Central Bank, when a widely anticipated 25 basis point reduction in interest rates might determine the Euro’s short-term direction. Uncertainty over global trade tensions and changing projections by major financial institutions such as Deutsche Bank also contribute to the confusion, leaving market participants vigilant for any hints about the future course of monetary policy on both the Atlantic and other sides. KEY LOOKOUTS • Markets are expecting a 25 basis point rate cut in Thursday’s European Central Bank meeting, and they are looking for forward guidance on the future of monetary easing. • Federal Reserve officials, particularly Raphael Bostic, indicate that rate cuts might take a bit longer as the US central bank stays loyal to its 2% inflation target. • Market participants look for the ECB’s Bank Lending Survey for information on credit conditions, which may have implications for both the rate decision and the ECB’s economic outlook. • Increased trade uncertainty and possible US tariff changes remain weighing on market sentiment, providing near-term support for the Euro with recession fears in the US. With the EUR/USD pair trading around the 1.1350 mark, market attention turns to a number of key drivers that may decide its next direction. The European Central Bank is to make its highly anticipated policy rate decision on Thursday, with traders broadly factoring in a 25 basis point interest rate cut, while also looking for any guidance on future easing cycles. Across the Atlantic, the Federal Reserve’s measured approach to inflation — in the wake of Atlanta Fed President Raphael Bostic’s comments — indicates that the journey towards U.S. rate cuts could be slower than anticipated. The publication of the ECB’s Bank Lending Survey will also provide new clues on the state of credit in the Eurozone. At the same time, persistent global trade tensions and doubts over possible U.S. tariff shifts remain to influence investor mood, offering risk and support to the Euro in the short term. The EUR/USD pair remains anchored around 1.1350 as markets look for the ECB’s anticipated 25 basis point rate cut and more hints on monetary policy. The US Dollar, meanwhile, looks to stabilize as Fed officials remain cautious about inflation and ongoing global trade tensions. Investors look for major data and central bank comments to determine the next move. • EUR/USD hovers around 1.1350 as the pair remains range-bound with risky market sentiment. • The US Dollar tries to firm up as stagflation fears reemerge and dampen global risk appetite. • Federal Reserve’s Bostic indicates a long way to go before reaching the 2% inflation goal, dashing hopes for imminent rate cuts. • ECB to cut the rate by 25 basis points at its policy meet on Thursday, keeping the Euro in limelight. • Deutsche Bank revises rate cut prediction for Fed, anticipating first cut in Dec 2025, two additional cuts in early 2026. • The ECB’s Bank Lending Survey (BLS) is under the spotlight for information regarding credit conditions and the health of the Eurozone economy. • Global trade tensions and recessionary concerns continue to underpin the Euro and place pressure on the US Dollar’s rebound. The EUR/USD currency pair remains firm as market participants look towards this week’s key central bank news and economic releases. The European Central Bank is widely anticipated to cut interest rates by 25 basis points at its next policy meeting, a move designed to underpin growth throughout the Eurozone. Meanwhile, market players are monitoring the ECB’s Bank Lending Survey, which will offer useful insight into how credit conditions are influencing the region’s overall financial well-being. EUR/USD DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, the US Dollar is holding its ground as traders digest recent comments from Federal Reserve officials. Atlanta Fed President Raphael Bostic’s statement underlined that the path to bringing inflation back to the 2% target remains challenging, hinting that US rate cuts may not arrive as soon as previously expected. In addition to central bank indications, persistent global trade tensions and policy uncertainty are also exercising considerable influence over investor sentiment, with markets pricing in possible risks to the global economy in the coming months. TECHNICAL ANALYSIS EUR/USD is trading around the 1.1350 level, hinting at consolidation as the pair awaits strong directional signals. The latest price action suggests indecision surrounding major levels of resistance and support, pointing to the fact that traders wait for new sparks from central bank policies or fresh economic data to push through resolute moves. A continued penetration of near-term resistance may be enough to establish further room on the upside, but a inability to maintain present support levels would risk exposing the pair to greater bear pressure short-term. FORECAST If the European Central Bank’s forthcoming policy announcement and economic commentary succeed in finding an even keel — loosening but remaining upbeat on the recovery of the Eurozone — then the EUR/USD pair might strengthen in the near term. Surprise improvements in Eurozone economic statistics or hints at weakening US inflation might similarly prop up the Euro, sending the pair higher to resistance levels as risk appetite is regained by investors. On the flip side, if the rate cut by the ECB is coupled with a more dovish tone or the US Dollar gains new strength on the back of improved economic indicators or diminishing recession fears, EUR/USD could see fresh selling pressures. Also, ongoing global trade tensions and any rise in geopolitical tensions would tempt investors to take refuge in the
