EUR/USD faces pressure as ECB's Kazaks dampens rate cut expectations

EUR/USD has come under selling pressure following hawkish comments from ECB Governing Council member Martins Kazaks, who warned markets against expecting rate cuts at every policy meeting. The statement suggests the ECB may adopt a more gradual approach to monetary easing than currently priced in by markets, which had been anticipating consistent cuts throughout 2025. This guidance contrasts with market expectations of aggressive ECB easing to combat slowing eurozone growth and persistent below-target inflation. The euro initially strengthened on the comments as traders recalibrated their rate cut expectations, potentially supporting EUR/USD above the 1.0500 psychological level. Technical indicators show the pair testing resistance near the 50-day moving average, with support established at recent lows. Traders should monitor upcoming ECB communications and eurozone economic data for further clarity on the central bank's policy trajectory, as any shift in rate expectations could drive significant volatility in euro crosses.