EUR/USD Price Forecast: Downward-sloping 20-day EMA reflects bearish tone, ECB policy awaited
The EUR/USD pair trades slightly higher to near 1.1550 during the Asian trading session on Thursday. The major currency pair edges higher as the Euro (EUR) gains ahead of the European Central Bank’s (ECB) monetary policy announcement at 12:15 GMT.
The ECB is expected to raise its Deposit Facility Rate by 25 basis points (bps) to 2.25%, in an attempt to counter accelerated inflation due to elevated energy prices. This will be the first monetary policy adjustment by the ECB after maintaining a status quo in the last eight policy meetings.
A string of ECB officials stated in their latest remarks that the central bank needs to act soon, citing upside inflation risks in the wake of the energy supply crisis.
Investors will pay close attention to ECB President Christine Lagarde’s commentary regarding whether there will be second-round effects of inflation in the continent.
Meanwhile, the US Dollar (USD) claws back half of its early losses amid fears that the ceasefire between Iran and the United States (US) will be over, following the exchange of attacks. As of writing, the US Dollar Index (DXY) trades 0.11% lower to near 99.97.
EUR/USD technical analysis
EUR/USD trades marginally higher at around 1.1550 at press time. However, the overall tone remains bearish amid a Symmetrical Triangle breakdown and downward-sloping 20-period Exponential Moving Average (EMA), which is at 1.1603
The Relative Strength Index (RSI) below 40.00 hints at fresh selling pressure while remaining far from oversold extremes.
On the topside, initial resistance is located at the 20-period EMA around 1.1603, followed by the broken ascending trend support turned resistance at 1.1623, ahead of the more formidable descending trend line barrier at 1.1707. Looking down, the pair could slide to the March 16 low at 1.1411 if it falls below the June 8 low at around 1.1500.
(The technical analysis of this story was written with the help of an AI tool.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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