Markets widely expect the European Central Bank (ECB) to have halted rate cuts, which could support the euro in the near term. ECB President Christine Lagarde reiterated that the current monetary policy stance is appropriate. Meanwhile, ECB policymakers François Villeroy de Galhau and Gediminas Šimkus stated there is no reason for immediate rate cuts or hikes, as the current stance is considered "good." Lagarde noted that, given the resilience shown by the Eurozone economy amid external trade pressures, the new projections to be released by the ECB next week might revise growth forecasts upward. Speaking at an event hosted by the Financial Times on the 10th, she pointed out that the Eurozone has withstood U.S. tariff measures better than expected. She emphasized that the EU has not retaliated against these measures, the euro exchange rate remains stable, and the labor market stays robust. Based on this, following the previous upward revision, she expects growth forecasts could be raised again at the December policy meeting to reflect the positive momentum. Besides, as hawkish remarks from policymakers increase, money markets are rapidly reassessing the ECB's policy path. Traders no longer expect any rate cuts next year; current market pricing shows the probability of a 25-basis-point hike next year rises from 30% on Tuesday to 40%. Swap market data also indicates traders see a 50% chance of a rate hike by the end of 2026, while completely ruling out any cuts. This fundamental shift reflects growing policymaker confidence that borrowing costs can remain unchanged or even rise in the foreseeable future. The shift is pushing global bond yields higher and signals investors' view that the ECB's focus is shifting from stimulating the economy to consolidating inflation control achievements and adapting to economic recovery.

The Fed concluded its two-day meeting on Wednesday, deciding to cut rates by 25 basis points — the third rate cut this year. Fed officials were divided over lowering rates to the 3.50%–3.75% range, with both supporters and opponents expressing dissent. Traders viewed Fed Chair Jerome Powell's speech as less hawkish than expected, creating some selling pressure on the USD/EUR exchange rate. In addition, concerns about the Fed's independence under President Trump have intensified, potentially adding downward pressure on the dollar. Wall Street still sees White House economic adviser Kevin Hassett as the most likely candidate for the next Fed chair. Moreover, analysts believe Hassett could push for further rate cuts. Traders will closely watch speeches by Fed officials later in the day, including Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee. Any hawkish comments from Fed officials could help limit the dollar's decline in the short term. 

Based on the four-hour chart, Bollinger Bands and moving averages are diverging upward. After the MACD formed a golden cross signal, EUR/USD has been rising strongly along the Bollinger Upper Band, indicating the bullish trend remains intact. RSI stands at 69, showing strong bullish sentiment, and the price is likely to test round-number levels and recent highs around 1.18 and 1.192. Regarding the weekly chart, Bollinger Bands are narrowing, the EMA12 is flattening, and the MACD and signal lines are near the zero axis. All these suggest that a trend reversal could occur at any time. If the MACD forms a golden cross, the price will likely break above 1.20. RSI is at 60, reflecting optimistic market sentiment; as long as EUR/USD does not fall effectively below EMA12, the bullish trend will persist. In the short term, buying at lows is recommended.

Trading direction: Buy

Entry price: 1.166

Target price: 1.2

Stop loss: 1.15

Support: 1.166/1.16/1.15

Resistance: 1.18/1.192/1.2