EUR/USD: Range-bound movements on the day – OCBC

Euro (EUR) was little changed, last at 1.1415 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Room for Fed to resume easing cycle in due course

"Daily momentum is not showing a clear bias for now while RSI fell. Support at 1310 (21 DMA), 1.1235 (23.6% fibo retracement of 2025 low to high). Immediate resistance at 1.1420/30 levels before 1.15 levels."

"Last week ECB lowered rate by 25bps, as widely anticipated. But more importantly, Lagarde commented that the ECB is getting to the end of a monetary cycle 'that was responding to compounded shocks, including COVID, the illegitimate war in Ukraine and the energy crisis'. She also said that the ECB is now 'in a good position' to deal with uncertainties ahead, not least due to US trade policies."

"Other ECB officials have also echoed similar views. Vujcic said that the ECB is nearly done while Stournaras said that the bar for more rate cuts is high. Our house view looks for 1 more cut this year, but this is already more than priced in. ECB signalling an 'end is near' reinforced our earlier view that prospects of ECB cut cycle nearing its end and room for Fed to resume easing cycle in due course should see yield differentials narrow in favour of EUR."