USD Bears Face Limited Damage Despite Fed Cut: EUR/USD Holds 1.0500

Despite the Federal Reserve's rate cut, USD bears faced contained losses as EUR/USD struggled to break above 1.0550, currently trading at 1.0520 (+0.3%). The Dollar Index fell modestly to 106.40, finding support from hawkish Fed projections showing only two rate cuts expected in 2025. EUR/CHF remained stable at 0.9380, suggesting limited euro strength. Market positioning data shows speculators remain net-long USD, providing a cushion against deeper declines. Technical analysis reveals EUR/USD faces strong resistance at 1.0580 (50-day MA), while support sits at 1.0480. The relatively muted dollar reaction suggests markets had largely priced in the Fed's move, with focus shifting to ECB policy divergence. Traders should monitor upcoming Eurozone inflation data, which could determine whether EUR/USD can sustain gains above 1.0500.