EUR/USD surges above 1.0900 despite ECB's 25bp rate cut

EUR/USD rallied 0.5% to 1.0920 in a counterintuitive move following the European Central Bank's decision to cut interest rates by 25 basis points. The euro's strength stemmed from ECB President Lagarde's hawkish commentary suggesting a pause in the easing cycle, with officials emphasizing data dependency and inflation risks. The central bank revised its inflation forecasts higher for 2025, signaling fewer rate cuts than markets had anticipated. Simultaneously, weak US economic data weighed on the dollar, with ISM Services PMI disappointing at 51.2 versus 52.5 expected. Technical momentum favors further euro gains, with EUR/USD breaking above the 1.0900 psychological resistance. The next targets lie at 1.0950 and the 1.1000 round figure. Support has formed at 1.0880, coinciding with the 50-day moving average. The diverging monetary policy outlooks between the ECB and Fed continue to drive the pair higher.