ECB Cuts Rates. EUR/USD Spikes to 1.5-Month HighECB Cuts Rates. EUR/USD Spikes to 1.5-Month High
Yesterday, as widely expected, the European Central Bank (ECB) cut interest rates for the eighth time since May 2024. According to ForexFactory, the main refinancing rate was lowered from 2.40% to 2.15% (having stood at 4.50% in May 2024).
According to Reuters:
→ ECB President Christine Lagarde stated that interest rates are now at a “good level”, despite the extremely high uncertainty caused by tariff threats from President Donald Trump.
→ Following the press conference, markets interpreted the message as a sign that the ECB is unlikely to cut rates again at its next meeting in July.
In response to the ECB's decision, the EUR/USD rate jumped to its highest level in a month and a half, but later retreated (as indicated by the arrow) back to previous levels.
Technical Analysis of the EUR/USD Chart
Four days ago, while analysing the EUR/USD chart, we:
→ drew an ascending channel;
→ suggested that bullish momentum could push the EUR/USD rate up to the psychological level of 1.1500 during the current week.
In fact, at yesterday’s peak, the rate came very close to 1.1500. However, a candlestick with a long upper shadow had formed on the EUR/USD chart, by the end of the day. Additionally, this morning, the 1.1450 level has acted as a resistance zone.
This suggests bearish activity, which could pull the rate down towards the lower boundary of the local channel (outlined in black), and possibly even attempt a breakout below it.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
