EUR/USD has experienced a soft tone, slipping slightly below yesterday’s low as persistent Dollar strength continues to weigh on the pair [1]. According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Euro has not found respite from USD strength, with technical support at 1.1500/05 and resistance near 1.1560. If weakness persists below the channel base, a retest of the 1.14 area is likely [1].
ECB data released showed a moderation in Euro area inflation expectations in February, prior to the onset of Gulf hostilities. Despite this moderation, policymakers remain vigilant regarding risks from rising energy prices [1]. ECB President Lagarde emphasized caution, stating that the scale of the shock is 'probably beyond imagination at this point,' and indicated the central bank will not act precipitously on rates until it can fully assess ongoing developments [1].
Technically, Scotiabank maintains a mild upward bias for EUR/USD stemming from the mid-month test of the 1.14 area, but the spot retains a soft undertone. The market is closely watching key supports, with any breach below 1.1500/05 potentially targeting a retest of 1.14 [1].
No explicit market reactions or analyst opinions regarding future price movements beyond the technical commentary and ECB caution were provided in the article [1].
CONCLUSION
EUR/USD remains under pressure from Dollar strength, but key technical supports are holding for now. ECB caution and moderating inflation expectations suggest a wait-and-see approach on rates, with energy price risks still in focus. The market is watching for any break below 1.1500/05, which could trigger further downside toward 1.14.