FX.co ★ Helsinki | EUR/USD

EUR/USD The euro remained under considerable selling pressure on Wednesday, as the EUR/USD currency pair retreated toward the 1.1300 support region. This decline was largely fueled by a resurgence in US dollar strength, underpinned by improving risk sentiment in the market. The US Dollar Index (DXY) surged to fresh weekly highs near 99.80, reflecting broader demand for the greenback. This uptick came amid easing concerns over trade tensions and the political rift between former President Trump and Federal Reserve Chair Jerome Powell. The Federal Reserve, as anticipated, kept its benchmark interest rates steady within the 4.25% to 4.50% range. During his statement, Chair Powell reaffirmed the central bank’s commitment to curbing inflation, even as the specter of rising tariffs threatens to push the economy toward stagflation. He emphasized a data-dependent approach to future rate decisions, underscoring the Fed’s caution amid intensifying economic and political headwinds. Meanwhile, across the eurozone, the European Central Bank (ECB) provided a widely expected 25-basis-point rate cut, obtaining its key rate down to 2.25%.

Notably, the ECB removed the term “restrictive” from its policy communication, signaling a potential shift toward a more accommodative monetary stance. Investors interpreted this move as a possible precursor to another rate adjustment in June, especially given the bank’s continued emphasis on a data-driven outlook. Technically speaking, the EUR/USD pair now faces strong resistance at the 1.1390 mark, with additional hurdles at 1.1440 and 1.1543. On the downside, immediate support is near 1.1310, followed by more substantial protection around the 1.1150 level. As the divergence in central bank policies deepens, currency traders are keeping a close eye on upcoming economic indicators that could further sway market sentiment and influence short-term trends in the forex landscape.