EUR/USD is trading near the 1.1550 level on Thursday, while the euro (EUR) remains little changed despite expectations that the European Central Bank (ECB) will raise interest rates at its upcoming policy meeting. Investors remain cautious ahead of the decision, focusing on policymakers’ guidance on the future path of monetary policy.
Markets widely expect the ECB to raise interest rates by 25 basis points as officials continue efforts to bring inflation back on target. However, uncertainty over the pace of future monetary tightening and concerns about the euro zone’s economic prospects are limiting demand for the single currency ahead of the announcement.
Meanwhile, the US dollar (USD) is finding support after the latest US inflation data showed that the headline consumer price index (CPI) remained at 4.2% y/y in May. Core CPI rose to 2.9% y/y and investors remain cautious about declaring victory over inflation as the energy shock of the Iran war remains risky.
Short-term technical analysis:
On the 4-hour chart, EUR/USD is trading at 1.1550, maintaining a subdued tone as it trades below the 100-period plain moving average (SMA) at 1.1609 and holding onto nearby support. The pair is trading above the 20-period SMA at 1.1540, but a cluster of horizontal resistances at 1.1559 and 1.1573 are holding back the rally, reinforcing a corrective rather than impulsive recovery. A Relative Strength Index (RSI) of around 46 indicates modest, non-committal momentum, consistent with market consolidation into higher medium-term capitalization.
Upside, initial resistance is at 1.1559, then 1.1573, with the 100-period SMA at 1.1609 representing a more significant barrier that bulls would need to reclaim to ease the bear pressure. On the other hand, immediate support is seen at 1.1549, reinforced by the nearby 20-period SMA at 1.1540, with a break revealing the next horizontal low at 1.1535; a sustained move below these levels would pave the way for a deeper pullback in the near future.
(The technical analysis for this story was written with the aid of an AI tool.)
