The euro slipped against the U.S. dollar on Monday, as investors turned cautious ahead of this week’s European Central Bank policy meeting. The pause in momentum comes after a modest rally in EUR/USD last week, driven largely by dollar softness and improving eurozone sentiment.
EUR/USD dipped toward 1.0640, pulling back from recent highs as market participants recalibrated expectations around potential rate moves. The ECB is widely expected to hold rates steady, but traders are closely watching for signals on the timing of any future cuts, especially amid soft inflation data and patchy economic growth in the region.
EUR/USD 1-D Chart as of April 14th, 2025 (Source: TradingView)
The dollar, meanwhile, remained broadly stable as U.S. Treasury yields held firm and investors awaited a series of economic releases, including retail sales and industrial production figures. While recent U.S. inflation readings have cooled, Fed officials have remained cautious, reinforcing a “wait and see” approach on rate cuts.
Muted volatility across major pairs reflects the broader market uncertainty heading into a data-heavy week. For the euro, any dovish tilt from the ECB could weigh further on the currency, especially if accompanied by lower economic projections or more explicit forward guidance on easing.
Technical indicators suggest EUR/USD may continue to trade in a narrow range, with support near 1.0600 and resistance around 1.0700. Unless the ECB surprises with a more hawkish tone or U.S. data significantly misses forecasts, the pair could remain directionless in the short term.
For now, traders remain focused on central bank commentary and inflation trends, with the euro’s path likely to hinge on how clearly the ECB signals its next move. Until then, caution prevails, and the euro continues to drift lower amid a lack of fresh catalysts.
