EUR/USD Struggles Despite ECB Rate Hike Expectations

EUR/USD remains under pressure as the economic gap between the U.S. and Eurozone continues to widen. Strong U.S. growth, supported by resilient consumer demand, solid economic data, and AI-driven investment, contrasts sharply with weakening Eurozone activity, where recent PMI data points to a possible economic contraction.

Despite markets pricing in nearly three ECB rate hikes by April next year, the euro has struggled to benefit. Investors appear more focused on growth prospects and energy security than interest rate differentials.

Technically, EUR/USD remains trapped below a major resistance zone around 1.1680 - 1.1660 and continues to find support near 1.1590. However, weakening momentum indicators suggest downside risks are building. A break below the current consolidation range could expose 1.1510. Overall, the fundamental and technical outlook currently favours the bears unless the pair can reclaim resistance and improve its momentum profile.

EUR/USD Daily Chart