- The EUR/USD forecast shows the euro steady ahead of the European Central Bank meeting.
- Market participants expect the ECB to keep interest rates unchanged.
- The European Union is nearing a trade deal with the US.
The EUR/USD forecast indicates that the euro remains steady ahead of the European Central Bank meeting. Meanwhile, business activity data from major Eurozone economies aligned mainly with expectations. Market participants are also closely watching the progress in trade talks between the US and the European Union.
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On Thursday, the European Central Bank will hold its policy meeting. Market participants expect the central bank to maintain its current interest rate policy. The ECB’s monetary easing campaign has had a positive impact on the economy and inflation. Therefore, policymakers are under no pressure to cut interest rates. Still, traders are pricing one more rate cut this year, likely in December.
Meanwhile, the outcome of business activity data from France and Germany was largely expected. Germany’s services sector continued growing, supporting the case for a pause in rate cuts.
Elsewhere, reports have shown that the European Union is nearing a trade deal with the US. The deal would impose a 15% reciprocal tariff on goods from the Eurozone. It would be half of the 30% Trump had promised. Therefore, it would allow the economy to continue its recovery.
EUR/USD key events today
- ECB main refinancing rate
- ECB monetary policy statement
- US unemployment claims
- ECB press conference
- US flash manufacturing PMI
- US flash services PMI
EUR/USD technical forecast: Steep rally nears the 1.1800 resistance
On the technical side, the EUR/USD price trades above the 30-SMA, indicating bulls are in the lead. At the same time, the RSI trades near the overbought region, showing solid bullish momentum. The price recently broke above the 1.1701 key resistance, which solidified the bullish bias. Bulls are now eyeing the next hurdle at the 1.1800 level.
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Initially, EUR/USD was in a downtrend, trading below the 30-SMA, with the RSI under 50. However, this changed when the price reached the 1.1600 key support level. Bulls emerged with solid momentum, and the downtrend failed to continue lower. Instead, the price broke above the SMA, indicating a shift in sentiment.
Given the solid bullish bias, the price may soon reach the 1.1800 resistance level. A break above will strengthen the bullish bias. However, the price might pull back to retest the SMA before climbing higher.
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Saqib Iqbal
