EUR/USD Tests 1.10 as ECB Rate Cut Speculation Resurfaces

EUR/USD has rallied 0.5% to test the 1.1000 psychological level, driven by renewed speculation about potential ECB rate cuts amid slowing eurozone economic momentum. The pair's strength comes despite persistent hawkish rhetoric from ECB officials, who have maintained their data-dependent stance. Recent eurozone inflation data showing a decline to 2.2% YoY has fueled market expectations for earlier policy easing, with futures now pricing in a 65% probability of a rate cut by June. Technical indicators suggest the pair faces strong resistance at 1.1020 (January high), while support holds at 1.0950 (50-day moving average). The rally tests ECB policymakers' patience as they balance inflation concerns against growth risks. Traders should monitor upcoming eurozone GDP data and ECB member speeches for directional cues, as any dovish shift could accelerate EUR/USD gains toward 1.1050.