EUR/USD Nears Breakout as ECB Eyes Another Rate Cut
03 June 2025
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The euro is moving steadily toward a critical breakout level near 1.1440 as traders await the European Central Bank’s policy decision later this week. The ECB is widely expected to deliver its eighth straight rate cut, with analysts forecasting a 25-basis-point reduction that would lower the deposit rate to 2.00%. The move is aimed at reviving lending and consumption across the eurozone’s slowing economy.
Technical Outlook
On the 4-hour chart, EUR/USD is pressing against the upper boundary of a tightening triangle formation. A confirmed close above 1.1440 would reinforce bullish momentum, paving the way for a climb toward 1.1500 initially, and potentially extending toward 1.1620 if follow-through buying emerges.
Key Levels to Watch
If the breakout attempt stalls, immediate downside support rests near 1.1350. Traders are also closely monitoring momentum gauges such as RSI to assess whether current upside pressure has the strength to sustain a breakout or risks fading back into consolidation.
Broader Market View
The ECB’s aggressive easing path underscores just how fragile eurozone growth remains, and while rate cuts are designed to provide stimulus, they also risk eroding currency appeal over time. As a result, volatility around Thursday’s announcement could dictate EUR/USD direction for weeks ahead, with traders positioning for sharp moves in either direction.
