EUR/USD – ECB rate cut and dovish stance deepen bearish fundamentals

EUR/USD – Post-ECB trading remains choppy, with the pair confined to a 50-pip range, offering little clarity on near-term direction.

The European Central Bank’s 25-basis-point rate cut and dovish tone, signaling openness to further easing amid weak growth prospects, continue to weigh on the euro. This sentiment is exacerbated by disappointing economic data and political instability, particularly in Germany and France, keeping downside risks elevated.

Technically, the daily chart paints a mixed picture. Positive momentum is strengthening, and the stochastic oscillator is nearing oversold territory, suggesting potential for a rebound. However, this is counterbalanced by moving averages in a fully bearish setup, hinting that the pair may remain range-bound for now.

Attention now shifts to next week’s key economic events, including the Federal Reserve’s rate decision and the EU inflation report, which could provide clearer directional signals.

The 1.0475 level, representing the broken 23.6% Fibonacci retracement of the 1.0936/1.0332 downtrend, has served as a strong support, fending off several attempts to break lower. While this level remains the base for potential recovery efforts, a sustained loss of support would likely increase downside risks.

Res: 1.0528; 1.0563; 1.0597; 1.0630
Sup: 1.0475; 1.0432; 1.0400; 1.0332