EUR/USD Awaits ECB Rate Decision as Key Support Holds

EUR/USD is holding near 1.1550 ahead of this week's ECB rate decision, with markets expecting a 25-basis-point rate hike. The euro is receiving support from expectations that the ECB could maintain a hawkish tone due to persistent inflation, while improving German industrial production has provided some additional support. However, gains remain limited as investors continue to monitor Middle East developments and upcoming U.S. inflation data.

Attention is now focused on U.S. CPI and PPI figures, which could influence expectations for another Fed rate hike later this year. Stronger-than-expected inflation data would likely support the U.S. dollar and Treasury yields, while softer data could ease pressure on EUR/USD.

Technically, the outlook remains cautious. EUR/USD is recovering after the price slipped back toward 1.1500. A break below this level could expose 1.1450 and potentially 1.1410, while a recovery above 1.1600 and the 1.1670 resistance zone nearby the 200 and 50 DMA would be needed to improve the bullish outlook.

EUR/USD Daily Chart