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EURUSD cannot develop any downside momentum after the ECB rate cut
The ECB cut rates by 25 basis points and the Lagarde press conference is over. A summary by topic of the comments from Lagarde (and ECB) :
Growth & Economic Outlook
The Euro area economy is resilient, but the growth outlook is deteriorating.
Outlook remains clouded by uncertainty, with consumers likely to hold back on spending.
Trade disruptions and geopolitical risks are weighing on investment.
Growth in Q1 is likely positive; defense spending seen boosting manufacturing.
Risks to growth are tilted to the downside, especially from dampened exports and financing conditions.
Inflation & Monetary Policy
Most indicators point to underlying inflation trending toward 2%.
Wages are moderating, and domestic inflation is easing.
Long-term inflation expectations are anchored around 2%, aiding credibility.
Strong EUR may reduce inflation; higher import costs could lift it.
ECB removed “restrictiveness” from its language; in today’s volatile world, it’s no longer meaningful.
ECB will define the appropriate policy stance using data, readiness, and agility.
Policy will be meeting-by-meeting, using whatever tools are needed.
Policy Stance & Communication
Today's 25 bps cut was unanimous, though some governors had leaned toward a pause weeks ago.
ECB will undertake intense scenario analysis in coming weeks.
ECB does not target FX rates, but considers FX in its decisions.
The neutral rate is only applicable in a “shock-free” world, which we're clearly not in.
ECB remains flexible and pragmatic, guided by “safe, reliable” data.
Trade, Tariffs & FX
Tariffs are a negative demand shock; they will weigh on growth, and inflation effects may grow over time.
ECB is sticking to forecasts despite tariff risks.
No change in customer behavior due to U.S. tariffs observed yet.
On U.S. trade tensions, the EU’s most obvious response is a zero-for-zero tariff deal.
Expect re-routing of goods as tariffs disrupt traditional supply chains.
Stimulus & Additional Measures
Policymakers did not discuss stimulus at the meeting.
ECB will act if needed, but currently believes the adjusted policy path is appropriate.
Uncertainty & External Risks
Geopolitical risks, particularly around trade, are major sources of uncertainty.
Heightened uncertainty makes it harder to judge inflation and growth dynamics.
Lagarde admitted she cannot say if we are at the peak of uncertainty.
Technically, the EURUSD tried to move lower on the cut but after breaking below the 100 hour MA at 1.13495, the low could only reach 1.1337 before rebounding. The current price is at 1.1360. The trading range for the day is 74 pips. The average over the last month is 131 pips.
The sellers had their shot. They missed. It would take a move below the 100 hour MA and stay below. The strength in the EURUSD comes despite a Fed that is happy to wait and see, while the ECB is happy to cut given the risk to growth.
Of course, Pres Trump is now railing on the Fed chair and can't wait to replace him with someone who is more dovish. Of course, the most important rate might be the 10 year yield and not the shorter term Fed rate. The bond market will do the easing or tightening. The Fed seems to be intent on following the risk to inflation. .
This article was written by Greg Michalowski at www.forexlive.com. -
AUDUSD stuck in a range, eyes key resistance ahead
The AUDUSD continues to trade in a choppy, range-bound market since Tuesday. During the late Asian and early European sessions, the pair found support at 0.6334, which sits within a key swing area between 0.6326 and 0.6341 (see green numbered circles on the chart above).
On the topside, today’s high stalled at 0.6382, just below a notable resistance ceiling at 0.6390. The last 3 highs including yesterday, have stalled at that level (see red numbered circles). A break above that level would shift focus toward:
The 2025 high from February at 0.6407
The 50% retracement of the decline from the September 30, 2024 high, coming in at 0.6428
For now, AUDUSD remains range-bound, but a break outside the current boundaries could set the tone for the next directional move
This article was written by Greg Michalowski at www.forexlive.com. -
USDCAD: Bounces from key support but faces resistance hurdles ahead
The USDCAD has rebounded after finding firm support in the 1.3827–1.39499 zone, where multiple recent lows have formed a solid base. The pair has pushed back above the 100-hour moving average, currently near 1.3880, but bullish momentum has stalled, suggesting hesitation from buyers.
To build on this recovery, the pair needs to hold above the 100-hour MA and push toward the next upside targets:
Swing area between 1.3923-1.2932
Broken 61.8%retracement at 1.39465
200-day moving average at 1.4005
38.2% of the move down from the April 7 high at 1.40062
200-hour moving average at 1.40135
These resistance levels align closely and could act as a key decision area for traders. A break above would strengthen the bullish outlook and open the path toward the 50% retracement near 1.4061.
On the downside, a break below recent lows at 1.38278 would have traders looking toward the low price from November at 1.38171. Move below that level and the door for further downside momentum is opened (see post from yesterday for more information).
For now, price action is constructive off the lows, but confirmation through follow-through buying is critical to shift the broader bias.
This article was written by Greg Michalowski at www.forexlive.com. -
The EURUSD dips below the 100 hour MA. Can more downside momentum follow?
The ECB cut rates by 25 basis points, as expected, with a unanimous decision. The press conference is set to begin at 8:45 AM ET.
From a technical perspective, the EURUSD broke below its 100-hour moving average, currently at 1.13495—a key short-term bias barometer. The break increases the bearish tilt, with the next key target coming in at the 1.1271–1.1275 area. That zone includes:
The July 2023 high at 1.1275
The 61.8% retracement of the 2020 high to 2022 low at 1.12709
A break below this dual support would further open the downside. Watch for additional targets at the 38.2% retracement of the recent move up from last week's low and the rising 200-hour moving average.
Sellers are starting to take control—but need follow-through below key support to build momentum.
This article was written by Greg Michalowski at www.forexlive.com. -
The USD is marginally higher to start US trading session. What are the technicals saying?
The ECB will announce its interest decision imminently with expectations of a 25 basis point cut. Meanwhile stocks are starting the US session with the Dow down by about -600 points, but the S&P is up marginally and the Nasdaq is also up marginally. US yields are higher by a basis point of two. The USD is modestly higher.
EURUSD: Eyes on ECB rate cut and key technical support
With the ECB widely expected to cut rates by 25 basis points, the EURUSD is trading at 1.1359—still over 100 pips below this year’s high at 1.1473, but well above the 2024 low near 1.0200, keeping the pair closer to the high end of its yearly range.
For a more bearish technical bias to develop through the ECB decision, two key events need to occur:
Break below the 100-hour moving average at 1.13495 – Price is currently hovering just above this level.
Sustained move below the 1.1271–1.1275 support area – This zone includes the 61.8% retracement of the range from the 2020 high (at 1.1271) and the July 2023 high (at 1.1275).
A confirmed move below both levels would likely accelerate downside momentum. Keep an eye on these technical levels as the ECB rate decision approaches.
USDJPY: Bounces off key support but needs to clear 100-hour MA to shift bias
The USDJPY dipped into a key swing area that dates back to August and September, between 141.64 and 141.94. The low extended to 141.66 before rebounding modestly.
On the topside, the falling 100-hour moving average, currently at 142.90, is a key resistance level. Although the pair briefly broke above it during the European session, the move lacked follow-through. A sustained move above the 100-hour MA is needed to tilt the bias more bullishly.
If that happens, the next upside targets are:
200-hour moving average at 144.49
38.2% retracement of the recent decline at 145.32
There’s a clear runway for further upside, but the bulls need to reclaim and hold above 142.90 to open the door.
GBPUSD: Holds support and bounces back into key resistance zone
The GBPUSD fell during the Asian-Pacific and early European sessions, testing the early April swing high at 1.32067. While the pair briefly dipped below that level, reaching a session low near 1.32057, downside momentum stalled, and the price has since rebounded.
The recovery has taken GBPUSD back into a key swing area between 1.3222 and 1.3245. A move above the 1.3245 level would open the door toward yesterday’s high at 1.3292. A break above that, and then through 1.3312, would put the 2024 high at 1.3432 in focus.
For now, price action remains constructive above 1.3200, but buyers need to clear resistance to regain control.
This article was written by Greg Michalowski at www.forexlive.com.