EUR/USD gained sharply after ECB monetary policy. It hit an intraday high of 1.08405 and currently trading around 1.08154.
The ECB lowered important interest rates by 25 basis points, placing the deposit facility rate at 2.50%, and was expecting inflation to reach its 2% target in the medium term at 2.3% on average in 2025 and 1.9-2.0% in 2026-2027. At the same time, the ECB downgraded economic growth forecasts to 0.9% in 2025, 1.2% in 2026, and 1.3% in 2027 due to uncertainty of trade policy and poor investment. The ECB reiterated that the monetary policy is less tight but will be data-driven going forward, and market response will be cautious in the backdrop of wider economic and geopolitical issues.
Technical Analysis of EUR/USD
The pair is holding above the short and below the long-term moving average in the 4-hour chart. Near-term resistance is seen at 1.0850; a break above this may push the pair to targets of 1.0850/1.0870. Major bullish momentum is likely only if prices can break above 1.0870, where levels of 1.0935/1.100. On the downside, support is seen at 1.0660 any violation below will drag the pair to 1.0600/1.0500/ 1.0460.
Market Indicators and Trading Strategy
Commodity Channel Index (CCI)- Bullish
Average Directional Movement Index (ADX) - Bullish.
It is good to buy on dips around 1.0778-80 with a stop-loss at 1.0720 for a target price of 1.0935.


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