EUR/USD price steadies at $1.042 ahead of ECB rate decision and Lagarde speech
EUR/USD holds steady ahead of ECB rate decision, key support at 1.0404 in focus.
The EUR/USD pair is at a crucial juncture, given the impending European Central Bank (ECB) interest rate decision, which is set to dictate its near-term price trajectory.
Yesterday, the currency pair slipped below the significant 50-day EMA at 1.046, testing a 4-day low before finding support at the 100 EMA on the 4-hour chart at 1.0384.
Despite this brief recovery, closing the day at 1.042 marked a second consecutive bearish session for the week. Today, on January 30th, the pair has shown limited volatility, hovering around 1.042 during both the Asian and European sessions, as traders prepare for the European Central Bank (ECB) decision poised to influence its next move.
EUR/USD price dynamics (November 2024-January 2025). Source: TradingView.
The ECB's interest rate decision, scheduled for 13:15 GMT, could inject significant volatility into the EUR/USD exchange rate. Market expectations lean towards another rate cut, continuing the easing cycle initiated in December. ECB President Christine Lagarde's press conference at 13:45 GMT will be closely watched, as her comments could sway market sentiment.
EUR/USD at risk of 2024 low at 1.0331 if ECB rate cut fuels bearish move
From a technical standpoint, the 50-day EMA at 1.046 remains a near-term resistance level, challenging any potential bullish recovery. Just below the current trading level of 1.042, the 50% Fibonacci retracement level at 1.0404 provides immediate support.
A breach below this could accelerate a move towards 1.0331, the lowest point seen in 2024, indicating further bearish momentum. With the EUR/USD navigating through these critical support and resistance levels, today's ECB announcements could tilt the Euro lower, or offer a surprise that could lift the pair.
The Federal Reserve's upcoming interest rate decision created a risk-off sentiment in the market. As a result, EUR/USD retraced within its bullish ascending channel.
