EUR/USD Strengthens to 1.0920 on Growing Fed Rate Cut Expectations

EUR/USD has gained 0.35% to reach 1.0920 as fresh doubts emerge about the Federal Reserve's hawkish stance, with markets now pricing in a 65% probability of a September rate cut. The dollar's weakness accelerated after recent Fed communications suggested greater flexibility in monetary policy, contrasting with the European Central Bank's more measured approach to easing. Technical momentum has turned bullish, with the pair breaking above the key 1.0900 resistance level and the 50-day moving average at 1.0895. Eurozone inflation data released last week showed core CPI holding steady at 2.9%, supporting the ECB's cautious stance on rate cuts. Immediate resistance lies at 1.0950, coinciding with the August high, while support has formed at 1.0880. The diverging monetary policy outlooks between the Fed and ECB could drive EUR/USD toward the 1.1000 psychological level if upcoming US data confirms economic softening.