The EUR/USD experienced a slight recovery on Friday morning, bouncing back from a significant decline the previous day. On Thursday, during American trading hours, the pair reached its lowest point in ten weeks at 1.0811, reflecting a continuation of the weekly downtrend. As the European session unfolded, the currency pair managed to rise slightly, trading near 1.0850, although technical indicators do not yet signal a strong reversal or recovery momentum.
The European Central Bank (ECB) made headlines by lowering key interest rates by 25 basis points as anticipated in its recent October policy meeting. The ECB emphasized its commitment to a data-driven and meeting-by-meeting approach to shaping monetary policy, suggesting that future decisions will be closely linked to incoming economic data.
In the aftermath of the policy meeting, the economic outlook for the Eurozone appeared weaker than many had projected. The ECB’s president pointed to various challenges, including low confidence among consumers and investors, geopolitical tensions, and subdued investment levels, all contributing to potential risks for inflation. This cautious perspective contributed to downward pressure on the EURO as trading progressed on Thursday.
Looking ahead, Friday’s economic calendar does not feature any significant data releases that could influence market dynamics. Meanwhile, US stock index futures were trending positively, which could lead to more risk appetite in financial markets as the weekend approaches. Such risk-on sentiment may inhibit the USD’s ability to strengthen amid a more favorable outlook for equities.
From a technical standpoint, the Relative Strength Index remains just above the level of 30, indicating that the prevailing bearish trend is likely still in play. On the upside, immediate resistance looms at the 1.0870 level, while a breach above 1.0900 could trigger additional buying interest, potentially advancing toward 1.0950. Conversely, support levels are seen at 1.0830, followed by 1.0780 and 1.0740.
