EUR/USD Holds Firm as ECB Rate Hike Expectations Support the Euro

EUR/USD is holding near 1.1650, supported by stronger Eurozone inflation data and a softer U.S. dollar. Higher inflation and stronger-than-expected core inflation have reinforced expectations of another ECB rate hike on June 11, which is providing near-term support for the euro. However, concerns remain that higher borrowing costs could further slow the already weak Eurozone economy.

On the U.S. side, the dollar remains range-bound as markets monitor Middle East developments and await key labour market data, including Friday’s Non-Farm Payrolls report. While expectations of a cooling jobs market could weigh on the dollar, stronger-than-expected ISM Services PMI data highlights the resilience of the U.S. economy and supports the Fed’s higher-for-longer interest rate stance.

Technically, EUR/USD is consolidating between support at 1.1600 and resistance around1.1680. A break above this resistance zone could open the way toward 1.1800, while a move below 1.1600 may trigger a deeper decline toward 1.1500. Overall, the pair remains range-bound as traders await fresh economic and geopolitical catalysts.

EUR/USD Daily Chart