Euro Reverses ECB-Fueled Rally, Falls Back to 1.15 on Weaker Sentiment and Data

Euro Retreats from ECB-Driven Highs, Reclaims 1.15 Handle

The Euro (EUR) reversed course on Friday, falling 0.6% intraday and fully retracing Thursday’s ECB-fueled rally, pushing the EUR/USD pair back to the key 1.15 psychological level. The move reflects a shift in market sentiment and softer-than-expected Eurozone economic data, including trade and industrial production figures.

Thursday’s high was driven by a dovish tilt from the ECB, coupled with soft US Producer Price Index (PPI) data that weighed on the US Dollar (USD). However, sentiment faded into Friday.

Weak Data Pressures Euro, But Outlook Remains Constructive

Despite the current pullback, analysts maintain a bullish medium-term stance on the Euro.

“The fundamental outlook for EUR remains supportive, with the shift in relative central bank policy outlook as the ECB turns neutral while markets price in further easing from the Fed.”

Markets are now looking ahead to the Federal Reserve’s policy meeting (FOMC) next week, where traders expect more clarity on the US rate-cut timeline.

EUR/USD Technical View

• Immediate Support: 1.1500 (psychological level)
• Short-term Resistance: 1.1580 (Thursday’s high)
• Trend Bias: Bullish in the medium term
• Momentum: Bearish intraday, neutral to bullish overall

Read also: USD Index Forecast: Risk Sentiment Supports USD

Conclusion

The Euro’s retreat to 1.15 is technically a pullback within a larger bullish structure. With ECB policy stabilizing and Fed expectations shifting dovish, EUR/USD remains well-positioned for renewed upside heading into next week’s FOMC event.