EUR/USD Price Forecast: Downward-sloping 20-day EMA reflects bearish tone, ECB policy awaited

EUR/USD rises to near 1.1550 in countdown to the ECB’s monetary policy announcement.
The ECB is expected to raise interest rates to counter upside inflation risks.
Renewed Middle East conflicts are expected to improve the US Dollar’s safe-haven demand.

Sagar Dua FXStreet

The EUR/USD pair trades slightly higher to near 1.1550 during the Asian trading session on Thursday. The major currency pair edges higher as the Euro (EUR) gains ahead of the European Central Bank’s (ECB) monetary policy announcement at 12:15 GMT.

The ECB is expected to raise its Deposit Facility Rate by 25 basis points (bps) to 2.25%, in an attempt to counter accelerated inflation due to elevated energy prices. This will be the first monetary policy adjustment by the ECB after maintaining a status quo in the last eight policy meetings.

A string of ECB officials stated in their latest remarks that the central bank needs to act soon, citing upside inflation risks in the wake of the energy supply crisis.

Investors will pay close attention to ECB President Christine Lagarde’s commentary regarding whether there will be second-round effects of inflation in the continent.

Meanwhile, the US Dollar (USD) claws back half of its early losses amid fears that the ceasefire between Iran and the United States (US) will be over, following the exchange of attacks. As of writing, the US Dollar Index (DXY) trades 0.11% lower to near 99.97.

EUR/USD technical analysis

EUR/USD trades marginally higher at around 1.1550 at press time. However, the overall tone remains bearish amid a Symmetrical Triangle breakdown and downward-sloping 20-period Exponential Moving Average (EMA), which is at 1.1603

The Relative Strength Index (RSI) below 40.00 hints at fresh selling pressure while remaining far from oversold extremes.

On the topside, initial resistance is located at the 20-period EMA around 1.1603, followed by the broken ascending trend support turned resistance at 1.1623, ahead of the more formidable descending trend line barrier at 1.1707. Looking down, the pair could slide to the March 16 low at 1.1411 if it falls below the June 8 low at around 1.1500.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

ECB Rate On Deposit Facility

One of the European Central Bank's three key interest rates, the rate on the deposit facility, is the rate at which banks earn interest when they deposit funds with the ECB. It is announced by the European Central Bank at each of its eight scheduled annual meetings.

GBP/USD defends 1.3300 after strong UK PMI data

Following Thursday's sharp decline, GBP/USD clings to small gains above 1.3300 in the American session on Friday, supported by the upbeat UK Retail Sales and July PMI data. Nevertheless, the pair's upside remains capped as investors cling to a cautious stance amid a further escalation of tensions in the Middle East. The US July PMI data failed to trigger relevant price action.

EUR/USD remains below 1.1400 after mixed US PMIs

EUR/USD pressures daily lows below the 1.1400 mark in the American session on Friday. Mixed S&P Global PMIs, as manufacturing output contracted while services activity expanded in July, triggered no relevant market reaction. The focus remains in Middle East developments and inflation-related concerns.

Gold holds above $4,050 but momentum still missing

Gold builds on its modest intraday bounce and climbs above the $4,050 level on Friday, hitting a fresh daily high amid a modest US Dollar pullback. The fundamental backdrop, however, warrants some caution before confirming that the pullback from an over two-week high, touched on Wednesday, has run its course and positioning for any meaningful upside.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

XRP retreats as ETF interest cools

Ripple (XRP) slides toward the short-term $1.10 support on Friday, as broader crypto market sentiment weighs on crypto assets. The sell-off mainly stems from fears of inflation in the United States (US) amid the ongoing war in the Middle East and rising Oil prices.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.