ECB Rate Hike Expectations Fail to Lift EUR/USD

EUR/USD remains stuck in a phase of indecision, with the pair showing very little movement in recent sessions as markets balance expectations for both the ECB and the Federal Reserve. While traders increasingly expect the ECB to begin raising rates, the euro is still struggling because U.S. interest rates and Treasury yields remain significantly higher than those in Europe, continuing to support demand for the dollar.

The market is now pricing a strong chance of a 25 basis point ECB rate hike in June 2026, while the Fed is expected to stay mostly on hold in the near term before potentially turning more restrictive later in the year. However, the wide yield gap between U.S. and European bonds still favours the dollar and limits euro upside.

Technically, EUR/USD is losing bullish momentum as price action turns more neutral around key moving averages. RSI and MACD both reflect a lack of clear direction, suggesting the pair could continue moving sideways in the near term. Immediate resistance stands near 1.1650. A break below 1.1590 could shift momentum more clearly in favour of sellers.

EUR/USD Daily Chart