Emphasized by ECB President Christine Lagarde, she reiterated that monetary policy and the economy are in a healthy state. Still, she cannot yet announce the end of the rate-cutting cycle. When asked by the media if monetary easing has concluded, she replied: "I would never say that because I think the job of a central banker is never done." Investors and analysts generally believe that after eight rate cuts within a year, bringing the ECB's deposit rate down to 2%, the rate-cutting cycle may have come to an end. However, some officials still hinted at potential cuts, as forecasts suggest weak growth could keep inflation below target for years to come. Bert Colijn, an economist at ING Bank, noted that although recent industrial sentiment in the eurozone has shown slight optimism about output prospects, the reality is far from expectations. Eurozone industrial production declined 1.2% in seasonally adjusted month-on-month terms in August. He stated in a report: "The earlier production peak, driven by the U.S. advancing imports of European goods, has passed, and output has trended downward again in recent months." Large-scale investment programs in the eurozone will take time to materialize. Therefore, while the medium-term outlook is slightly optimistic, growth momentum is absent as U.S.-EU trade relations enter a new phase. "This means that manufacturing is unlikely to have contributed positively to GDP growth, keeping expectations for growth very muted."  

Investor concerns over escalating U.S.-China trade tensions and the lack of progress in resolving the U.S. federal government shutdown are eroding confidence in the U.S. dollar. U.S. President Donald Trump failed to reassure markets on Wednesday during a TV interview, confirming that the U.S. is already in a trade war with China, despite Treasury Secretary Scott Bessent attempting to downplay the White House's rhetoric by suggesting a trade war could still be extended. The Fed's Beige Book, released on Wednesday, echoed Chairman Jerome Powell's comments from the previous day, emphasizing that employment growth remains slow due to trade tariff pressures on businesses. These conclusions strengthen the case for further rate cuts in the coming months and add downward pressure on the U.S. dollar. On the economic calendar, eurozone trade balance data may provide some fundamental guidance for the euro ahead of ECB President Christine Lagarde's speech. In the U.S., the Philadelphia Fed Manufacturing Survey will be one of the few key indicators released before a series of Fed policymakers' speeches this week.

According to the ​daily chart, the EUR/USD MACD generated a death cross signal, with both MACD and Signal lines falling below the zero axis, indicating a shift into a bearish trend. The Bollinger Bands are widening downward, moving averages are diverging to the downside, and the RSI stands at 47, reflecting a pessimistic market sentiment. If the 1.1600 support level is breached, the pair is likely to test the previous low and the 200-day EMA, around ​1.1390 and 1.1370, respectively. Meanwhile, the Bollinger Bands are narrowing in the weekly chart, with the price oscillating near the midline. After a death cross, the MACD and signal lines are pulling back toward the zero axis but still have some distance to cover, indicating the continuing consolidation. The RSI is at 57, reflecting a cautious market sentiment. If the Bollinger Middle Bands give way, the pair could decline toward the 50-day EMA or even the Bollinger Lower Band. 

Trading direction: Sell

Entry price: 1.1657

Target price: 1.12

Stop loss: 1.182

Support: 1.145/1.14/1.12

Resistance: 1.182/1.192/1.2