EUR/USD Struggles Near 1.0455 as Market Awaits Fed and ECB Signals

The euro’s attempt to strengthen has been short-lived, with cautious ECB rhetoric and resilient U.S. data keeping buyers on edge. Earlier this week, the dollar weakened due to speculation that the Federal Reserve could relax policy later this year, yet hawkish remarks from Fed officials have constrained the decline for the greenback.

Here’s what’s driving EUR/USD:

• U.S. Dollar Strength: Recent data, including better-than-expected U.S. GDP and labor market figures, has kept the dollar supported.
• ECB’s Policy Uncertainty: ECB officials continue to push back on rate-cut expectations, but weak economic indicators in the Eurozone are raising concerns.
• Fed Rate Speculation: The market is still weighing when the Fed will start cutting rates, with March expectations fading but mid-year cuts still on the table.

Key Levels to Watch

• Resistance:
  • 1.0455 – Immediate hurdle for bulls
  • 1.0605 – Next upside target
  • 1.0780 – Strong resistance zone
• Support:
  • 1.0335 – Holding above this keeps bullish hopes alive
  • 1.0176 – Key downside level

The Relative Strength Index (RSI) is neutral, showing neither overbought nor oversold conditions.

EUR/USD Outlook

EUR/USD is at a critical juncture, with 1.0455 being the crucial barrier for the bulls. An established move above this level might lead the pair to aim for 1.0605; however, if 1.0335 is unsuccessful, a decline toward 1.0176 is more probable.

With ECB and Fed policy expectations shifting, traders should stay alert to economic data and central bank comments in the coming days.

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