11 September 2025,05:30
Daily Market Analysis
11 September 2025, 05:30
*ECB expected to hold rates unchanged (deposit facility 2.00%, main refinancing 2.25%) after its July cut, signaling policy stability.
*French political turmoil following a no-confidence vote and budget dispute weighs on euro sentiment, reinforcing a cautious ECB stance.
*Inflation near target and low unemployment support resilience, but stagnant growth raises pressure for accommodative guidance in Lagarde’s remarks.
The euro is trading within a tight range against major currencies as investors await the European Central Bank’s monetary policy decision later today. Markets widely anticipate the Governing Council will maintain interest rates unchanged, with the deposit facility rate expected to remain at 2.00% and the main refinancing rate at 2.25%, following a 25 basis point cut at its previous meeting.
The likelihood of a pause has been reinforced by recent political instability in France, where the National Assembly was dissolved after Prime Minister Gabriel Attal lost a no-confidence vote tied to a contentious €51 billion austerity budget. The political crisis in the eurozone’s second-largest economy has introduced renewed uncertainty, dampening sentiment toward the single currency and strengthening the case for the ECB to emphasize policy stability at this meeting.
Economic data present a mixed backdrop. Inflation remains near the ECB’s 2% target, reducing urgency for further tightening, while the unemployment rate stands at a multi-year low of 6.2%, supporting household resilience. However, growth momentum has slowed noticeably across the bloc, with recent GDP readings indicating near-stagnation—a dynamic likely encouraging the ECB to sustain accommodative conditions to bolster activity.
President Christine Lagarde’s post-announcement press conference will be closely watched for guidance on the timing and scope of future rate moves, particularly whether recent political and economic developments have altered the bank’s projected policy path. Should the ECB strike a more cautious tone than expected, the euro may face renewed pressure in the near term.
The pair has come under heavy selling pressure, extending its downtrend with losses of more than 3.5% from its recent peak at 1.8157. Downside momentum intensified in the last session after the price broke below its descending channel, reinforcing the strength of the bearish trend.
Currently, the pair is approaching a six-week low, with immediate resistance seen at 1.775. Failure to reclaim this level could leave the pair vulnerable to further declines toward the next support at 1.7615.
Technical indicators underscore the bearish outlook. The RSI has slipped into oversold territory, while the MACD was rejected at the zero line, both signaling accelerating downside momentum and aligning with the prevailing bearish bias.
Resistance level:1.7750, 1.7840
Support level: 1.7615, 1.7480
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