EUR/USD held its June 26 support after the ECB left interest rates unchanged and Christine Lagarde declined to signal the bank’s next move. Source comments that policymakers stand ready to hike in September, together with broad-based dollar buying, kept the pair under pressure before buyers stepped in.
The euro slid to the edge of its recent range against the dollar on Thursday, then turned back. EUR/USD fell to 1.13635 — just above the June 26 low of 1.13616 — before buyers stepped in and sparked a bounce.
ECB holds, keeps its options open
Policymakers left all three key interest rates unchanged in a unanimous decision, as markets widely expected. Lagarde offered no forward guidance for September, stressing that “the burden of proof is on the data” and that the decision will stay data dependent.
Headline inflation eased to 2.8% in June, yet the ECB expects the recent energy shock to keep it above the 2% target into the first half of 2027. Policymakers still see little sign that higher energy costs are feeding into broader inflation.
Source comments point to September
Attention turned to a possible September move after sources said ECB officials are ready to raise rates that month. Reuters reported that Lagarde confirmed policymakers would discuss raising minimum reserve requirements as part of a debate over mitigating the central bank’s losses.
The pair traded lower both before and after the decision, helped by broad-based dollar buying.
Where the pair goes next
The June 26 low at 1.13616 remains the line in the sand. A sustained break below it would shift focus toward the June low at 1.13238.
If support holds, traders will look to reclaim 1.13775 on the way back toward the middle of the 1.1362 to 1.1482 range.
Sources: investingLive, Reuters
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