EUR/USD Slides to $1.1350—ECB Cut Incoming?

The EUR/USD pair is under pressure as the European Central Bank (ECB) prepares for its sixth rate cut in a row.

The central bank is expected to lower its main refinancing rate from 2.65% to 2.40% today to cushion the eurozone economy from global trade headwinds.

Bank of America economist Ruben Segura Cayuela is forecasting a 25 basis point cut and thinks the ECB may leave the door open for more easing if conditions deteriorate. All eyes will be on President Christine Lagarde’s press conference to see if she drops any dovish hints on future policy.

Although the ECB may not commit to another cut today, any soft language from Lagarde will weigh on the euro in the short term.

Fed Cautious as US Growth Slows Under Tariff Pressure

Meanwhile the Fed is being cautious. Chair Jerome Powell has expressed concern over the recent US tariffs and their impact on the economy. He acknowledged slowing growth, including a pullback in consumer spending and a possible hit to GDP from front-loaded imports.

Powell said the Fed needs more clarity on the full impact of the tariffs before making the next move. The message was clear: no rate moves for now.

Markets reacted quickly to Powell’s comments. The S&P 500 fell 2.8% and the US dollar dropped as traders repriced Fed policy and braced for volatility.

EUR/USD Technical Outlook: Key Support in Play

EUR/USD is at 1.1350 after breaking below the ascending trendline that had supported the recent rally. The pair is now testing the 50-period Exponential Moving Average (EMA) at 1.1308 – a level that will decide the next move.

If the pair closes below this zone, it will confirm a bearish reversal with targets at 1.1269 and 1.1196. Momentum indicators support this view with the Relative Strength Index (RSI) drifting lower at 50.3.

Trade Setup:

• Entry: Sell on confirmed break below 1.1300

• Targets: 1.1269 – 1.1196

• Stop Loss: Above 1.1400

• Pro Tip: Wait for a full candle close below 1.1300.

Conclusion: Volatility Ahead

The ECB is easing and the Fed is being cautious. The EUR/USD may be under pressure. Rate divergence, tariffs and weak data keep traders on edge. Get ready for more volatility as markets process central bank comments and position for the next move.