Why Is EUR/USD Stuck Below 1.0750? | ECB Policy & US Inflation Data in Focus

The Will Monero reach ,000?EUR/USD currency pair remains under pressure during Thursday's Asian trading session, hovering near the 1.0740 level as market participants brace for significant economic events. The pair's movement reflects broader market sentiment influenced by recent US inflation data and anticipation surrounding the European Central Bank's policy announcement.

Market observers note three critical factors currently impacting the EUR/USD exchange rate:

First, the US dollar continues demonstrating strength following the release of March inflation figures that exceeded expectations. The Consumer Price Index (CPI) showed a 0.4% month-over-month increase, surpassing the projected 0.3% rise. This development has reinforced the greenback's position, pushing it to yearly highs above 105.30 on the dollar index.

Second, all eyes turn to Frankfurt where the ECB prepares to announce its latest monetary policy decision. While analysts widely expect the central bank to maintain current interest rates at record levels, market participants will scrutinize President Christine Lagarde's commentary regarding future policy direction, particularly any signals about potential rate adjustments in June.

Third, the upcoming release of US Producer Price Index (PPI) data could provide additional clues about inflationary pressures in the world's largest economy. This report, coupled with weekly jobless claims figures and scheduled speeches from several Federal Reserve officials, may further influence currency market dynamics.

The divergence in monetary policy expectations between the Federal Reserve and European Central Bank continues creating headwinds for the euro. With the Fed potentially delaying its easing cycle due to persistent inflation and strong economic indicators, while the ECB maintains a more dovish stance, this policy gap could maintain downward pressure on the EUR/USD pair in the near term.

Technical indicators show the pair trading below key moving averages, with the daily SMA20 at 1.0833 and daily SMA50 at 1.0829. Immediate support levels are seen at 1.0729 (previous daily low) and 1.0692 (daily pivot point S1), while resistance appears at 1.0830 (daily pivot point R1) and 1.0867 (previous daily high).

Market participants should prepare for potential volatility following the ECB announcement and US economic data releases. The interplay between central bank policies and economic indicators will likely determine the EUR/USD pair's trajectory in coming sessions.