EUR/USD declines as Fed rate cut expectations shift on mixed signals

EUR/USD experienced downward pressure during Thursday's session as traders recalibrated Federal Reserve rate cut expectations following Wednesday's inflation data. The pair retreated from recent highs as market participants processed conflicting signals ahead of the crucial FOMC decision. US inflation figures came in line with expectations, maintaining uncertainty about the Fed's policy stance, while rising jobless claims added another layer of complexity to the monetary policy outlook. The European Central Bank's decision to hold rates steady provided limited support for the euro, with officials expressing cautious optimism about the eurozone economy. Technical analysis shows EUR/USD testing key support levels, with immediate resistance at the 1.1100 psychological mark. The mixed fundamental backdrop suggests continued volatility as traders await clearer directional cues from central bank communications and upcoming economic releases.