CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Euro Forecast: EUR/USD Vulnerable to ECB Rate Cut

Article By: ,  Strategist
Today 6:00 PM

Euro Outlook: EUR/USD

EUR/USD may stage further attempts to test the January high (1.0533) ahead of the European Central Bank (ECB) interest rate decision as it snaps the series of lower highs and lows from last week.

Euro Forecast: EUR/USD Vulnerable to ECB Rate Cut

EUR/USD retraces the decline from the February high (1.0529) as the Euro Area Consumer Price Index (CPI) points to sticky inflation, with the headline reading printing at 2.4% in February versus forecasts for a 2.3% reading.

Join David Song for the Weekly Fundamental Market Outlook webinar.

 

It remains to be seen if the ECB will respond to the data print as the Governing Council argues that ‘most measures of underlying inflation suggest that inflation will settle at around our target on a sustained basis,’ and the rebound in EUR/USD may turn out to be temporary as the central bank is anticipated to further unwind its restrictive policy.

Euro Area Economic Calendar

The ECB is expected to deliver another 25bp rate-cut in March as the ‘risks to economic growth remain tilted to the downside,’ and the updates coming out of the central bank may drag on the Euro should President Christine Lagarde and Co. keep the door open to implement lower interest rates.

With that said, EUR/USD may track the flattening slope in the 50-Day SMA (1.0391) as it continues to trade within last month’s range, but the exchange rate may establish a new trend should it push above the January high (1.0533).

EUR/USD Chart – Daily

Chart Prepared by David Song, Senior Strategist; EUR/USD on TradingView

  • EUR/USD snaps the recent series of lower highs and lows following the failed attempt to close below 1.0370 (38.2% Fibonacci extension), with a breach above the January high (1.0533) opening up the 1.0580 (78.6% Fibonacci extension) to 1.0610 (38.2% Fibonacci retracement) region.
  • Next area of interest comes in around the December high (1.0630), but lack of momentum to hold above the 1.0448 (2023 low) to 1.0480 (100% Fibonacci extension) zone may keep EUR/USD within the January range.
  • Need a close below 1.0370 (38.2% Fibonacci extension) to bring the February low (1.0211) on the radar, with the next area of interest coming in around the January low (1.0178).

Additional Market Outlooks

US Dollar Forecast: USD/JPY Rebound Retrained by Slowdown in US PCE

AUD/USD Negates Ascending Channel amid Five-Day Selloff

Canadian Dollar Forecast: USD/CAD Jumps with Trump Tariffs to Hit in April

GBP/USD Climbs to Fresh Monthly High to Approach Channel Resistance

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2025