Euro Uptrend to 1.10 Gains Pace, with ECB Rate Cuts Postponed

The Euro to dollar rate has been increasing since the middle of February, after EUR/USD made a reversal following the dip below 1.07. The 50 daily SMA was providing resistance for more than a week below 1.09, but in the last few days the uptrend has resumed again and it has picked pace as well, with the ECB refraining from discussing the start of rate cuts.

EUR/USD Daily Chart – The 50 SMA Has Been Broken

So, the initial decline in this forex pair found support from buyers just above the broken moving averages which is somewhat of a support zone. This support zone comes at 1.0860s where the price bounced from and pushed above 1.09 without much resistance on the way, although this is also due to increased USD weakness, as FED’s Powell confirmed that rate cuts are coming yesterday during the testimony at the US Congress.

No ECB Interest Rate Cut for Now

Yesterday EUR/USD experienced a decline initially right after the ECB’s decision to keep rates unchanged and revised down inflation expectations. ECB President Lagarde expressed concerns about slower economic growth, indicating a cautious stance. However, she emphasized the need for more data and confidence in the inflation outlook before considering further policy action.

Lagarde’s remarks indicating that rate reductions were not on the agenda for discussion in this meeting may have contributed to the rebound in the EURUSD pair. Investors were possibly expecting a more dovish tone from the ECB, but the absence of immediate rate cut discussions provided some relief, leading to a temporary uptick in the euro.

EUR/USD Live Chart

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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