Euro holds near 1.1700 following ECB policy stance

The EUR/USD pair declined to around 1.1700 after the European Central Bank (ECB) left key interest rates unchanged, a widely anticipated decision that provided little fresh directional impetus for the single currency.

As expected, the main refinancing rate was held at 2.15%, with the deposit facility rate unchanged at 2.0%. ECB officials reiterated their commitment to a meeting-by-meeting, data-dependent approach.

During the subsequent press conference, President Christine Lagarde stated that policymakers did not discuss either a rate hike or a cut at this juncture. She emphasised that the ECB does not have a pre-set path for interest rates and, given the prevailing high uncertainty, cannot provide forward guidance on future policy moves.

In parallel, the central bank released its latest quarterly economic projections. Growth forecasts were revised upwards to 1.4% for 2025, 1.2% for 2026, and 1.4% for 2027. The inflation outlook for 2026 was also adjusted higher, primarily driven by persistent price pressures in the services sector.

Technical analysis: EUR/USD

Four-hour chart

On the H4 chart, the pair completed a corrective rebound to 1.1760 and is now forming a downward impulse targeting 1.1706. A break below this level is anticipated, which would set the next local bearish target at 1.1640.

This scenario is technically confirmed by the MACD indicator. Its signal line is positioned above zero but is pointing sharply downwards, reflecting sustained bearish momentum and the potential for a further extension of the downtrend.

One-hour chart

On the H1 chart, the market has finished a first decline to 1.1705, followed by a correction to 1.1755. A second downward impulse towards 1.1705 is currently developing. A clear break below this support would signal the potential for a third wave of decline, targeting the 1.1645 level as a local objective.

This outlook is supported by the Stochastic oscillator, whose signal line is below the 50 level and trending firmly downwards.

Conclusion

The euro remains range-bound following a largely uneventful ECB meeting, with the central bank's cautious, data-dependent stance offering little support. The technical structure points to further downside risk, with a break below immediate support at 1.1705 likely to trigger a move towards the 1.1640 area.