EURUSD is trading close to a multi-week low as the market anticipates a widely expected 0.25% rate cut from the European Central Bank (ECB)

The euro slid to its lowest point in 2 ½ months during early European trading on Thursday, marking its fourth consecutive day in the red as part of a broader three-week downtrend.

Markets are focused on the European Central Bank’s (ECB) policy decision, expected later today, with widespread anticipation of the third rate cut this year. The ECB is likely to reduce interest rates by 25 basis points (bringing the deposit rate down to 3.25% from 3.50%) due to controlled inflation and an economy struggling with high borrowing costs.

While markets expect the ECB to cut rates three more times by March 2025, it’s unlikely that President Lagarde or other policymakers will confirm this, as they have maintained that future decisions will depend on incoming economic data at each meeting.

The daily chart shows a bearish setup, supported by strong negative momentum, Wednesday’s close below the 200DMA, and the formation of a 10/100-day moving average bear cross. Weekly indicators also point to further weakness, with the 14-week momentum indicator dipping into negative territory and a 5/200-week moving average death cross forming.

Immediate bearish targets include 1.0835 (Fibo 61.8% retracement of the 1.0601/1.1214 rise), 1.0809/00 (weekly cloud base and psychological level), followed by 1.0775 (August 1 higher low) and 1.0745 (Fibo 76.4%).

The broken 200DMA has reverted to initial resistance at 1.0872, with additional resistance at the falling daily Tenkan-sen (1.0922) and the base of the thick daily Ichimoku cloud (1.0968), which should cap any corrective rallies to keep the broader bearish trend intact.

Res: 1.0872; 1.0907; 1.0935; 1.0968
Sup: 1.0825; 1.0800; 1.0775; 1.0745