The Euro (EUR) gained against major currencies during the Asian trading session on Thursday, with EUR/USD trading slightly higher near 1.1550 and EUR/JPY rising for the fourth consecutive day to around 185.30 [1][2]. The Euro's strength comes ahead of the European Central Bank’s (ECB) monetary policy announcement scheduled for 12:15 GMT, where the ECB is expected to raise its Deposit Facility Rate by 25 basis points to 2.25% in response to accelerated inflation driven by elevated energy prices [1]. This would mark the first rate adjustment after eight consecutive meetings of maintaining the status quo [1]. Several ECB officials have recently emphasized the need for action due to upside inflation risks stemming from the energy supply crisis [1]. Investors are closely watching ECB President Christine Lagarde’s commentary for insights on potential second-round inflation effects [1].
Technical analysis for EUR/USD indicates a bearish tone, with the pair trading below the downward-sloping 20-day Exponential Moving Average (EMA) at 1.1603 and the Relative Strength Index (RSI) below 40, suggesting fresh selling pressure [1]. Resistance levels are noted at 1.1603, 1.1623, and 1.1707, while support is seen at 1.1500 and 1.1411 [1]. Meanwhile, the US Dollar Index (DXY) is down 0.11% to 99.97, reflecting some weakness in the USD amid geopolitical concerns [1].
For EUR/JPY, the cross maintains a constructive bias above the nine-day and 50-day EMAs, with the short-term EMA just above the medium-term line, indicating the broader uptrend remains intact after a recent pullback [2]. The 14-day RSI near 52 signals neutral-to-positive momentum [2]. The pair may target the upper boundary of the ascending channel at 187.80 and the all-time high of 187.95, recorded on April 17 [2]. Immediate support is at 185.24 and 185.07, with further downside exposing lows at 184.50, 181.87, and 180.81 [2].
A currency heat map shows the Euro was the strongest against the US Dollar, with a 0.11% gain, and also posted gains against other major currencies such as GBP, JPY, CAD, AUD, and NZD [2].
CONCLUSION
The Euro's strength ahead of the ECB rate decision reflects market anticipation of a policy shift to address inflation risks. Technical signals for EUR/USD remain bearish, while EUR/JPY shows a bullish bias. The ECB's upcoming announcement and President Lagarde's commentary are expected to be key drivers for further market movement.