EUR/USD Weakens as ECB Rate Cut Expectations Diminish

EUR/USD has retreated from recent highs, trading lower as market optimism regarding potential European Central Bank rate cuts begins to fade. The currency pair, which had gained momentum on speculation of more aggressive ECB easing, is now facing selling pressure as traders reassess the likelihood of near-term policy adjustments. Recent ECB communications have suggested a more cautious approach to monetary policy changes, dampening expectations for immediate rate cuts that had previously supported euro strength. The shift in sentiment comes amid persistent inflation concerns in the Eurozone and mixed economic data that complicates the central bank's decision-making process. Technical indicators show EUR/USD struggling to maintain support above key levels, with momentum indicators turning bearish. The pair faces immediate resistance at recent highs, while downside risks increase toward psychological support levels. Traders should monitor upcoming ECB speeches and Eurozone economic releases for further directional cues.