EUR/USD showed a nice pullback after ECB monetary policy. It hit an intraday high of 1.14945 and currently trading around 1.14911.
The ECB announced a widely anticipated 25 basis point cut to its three key interest rates, reducing the deposit facility rate to 2.00%, citing its updated assessment of the inflation outlook and effective monetary policy transmission, while also revising inflation forecasts downward. Although acknowledging controlled inflation, the ECB expressed increased caution regarding economic growth and potential trade tensions, maintaining a data-dependent policy stance with some members suggesting a possible pause in July before further rate cuts. Today’s decision lowers rates to what the ECB considers a “neutral” level, balancing confidence in disinflation with caution about the Eurozone's growth and external risks
The pair is holding above the short and long-term moving average in the 4-hour chart. Near-term resistance is seen at 1.1500; a break above this may push the pair to targets of 1.1600. Major bullish momentum is likely only if prices can break above the 1.160 target of 1.1660. On the downside, support is seen at 1.1435 any violation below will drag the pair to 1.1375/1.1300/1.1265/1.1200/1.1150/1.1090/1.1050/1.100.
Market Indicators and Trading Strategy
Commodity Channel Index (CCI)- Bullish
Average Directional Movement Index (ADX) - Bullish
It is good to buy on dips around 1.1400 with a stop-loss at 1.1350 for a target price of 1.1500/1.1600.
