EUR/USD Outlook: Euro Corrects as ECB and Fed Signals DivergeEUR/USDOANDA:EURUSDJohn_IsigeThe EUR/USD pair is developing a corrective movement after three consecutive bearish sessions, with price action stabilizing as traders evaluate the outcomes of the ECB and Federal Reserve meetings. The euro is attempting to recover, but policy divergence continues to limit upside momentum. ⸻ Fed Maintains Hawkish Tone The Federal Reserve kept rates unchanged at 3.50–3.75%, but delivered hawkish signals: •Only one rate cut expected this year •14 of 19 officials expect limited easing •7 policymakers see no changes in 2026 •Core inflation forecast raised to 2.7% Rising energy prices above $100 per barrel continue to reinforce inflation risks. This supports the US dollar and pressures EUR/USD. ⸻ Energy Crisis Raises Eurozone Risks The escalation in the Middle East increases energy-related inflation risks: •20% of global oil flows through Hormuz •30% of LNG shipments at risk •Supply disruptions remain possible These factors increase pressure on Eurozone inflation. ⸻ ECB Signals Potential Policy Shift ECB President Christine Lagarde signaled readiness to act: •Rate unchanged at 2.00% •Inflation forecast raised to 2.6% •Growth forecast lowered to 0.9% Markets still expect rates to remain unchanged, but some economists do not rule out hikes. ⸻ Upcoming Market Drivers Markets now await: •University of Michigan inflation expectations •1-year: 3.4% •5-year: 3.2% These data may increase market volatility. ⸻ Technical Analysis Indicators show weakening bullish momentum: •Bollinger Bands: sideways •MACD: turning downward •Stochastic: falling from overbought ➡️ Short-term bias: neutral-to-bearish ⸻ Key Levels Resistance •1.1577 •1.1600 •1.1621 •1.1655 Support •1.1529 •1.1500 •1.1450 •1.1400 ⸻ Trading Scenarios Bearish Scenario Sell below 1.1500 •Entry: 1.1495 •Target: 1.1400 •Stop-loss: 1.1550 •Timeframe: 2–3 days ⸻ Bullish Scenario Buy above 1.1577 •Entry: 1.1580 •Target: 1.1655 •Stop-loss: 1.1529 ⸻ Outlook EUR/USD remains influenced by ECB–Fed divergence and energy market risks. •Break below 1.1500 → bearish continuation •Break above 1.1577 → bullish recovery Short-term outlook remains neutral-to-bearish.