The EUR/USD has formed the expected bullish breakout above the former medium-term descending trendline resistance, which was in place from the 1 July 2025 high, and rallied by 0.8% to print an intraday high of 1.1778 on Tuesday, 9 September, during the Asia session at the time of writing.
After last Friday’s, 5 September, weaker-than-expected US non-farm payrolls data print for August, this week’s key risk events that are likely to trigger a significant volatile movement in the EUR/USD will be the ECB monetary policy decision cum ECB President Lagarde’s press conference, and the release of the US core CPI inflation rate for August, both of them taking place around the same time on Thursday, 11 September between 12.15 pm to 12.45 pm GMT.
ECB is likely to signal the end of its interest rate cut cycle
Fig. 1: The Eurozone/US implied policy interest rate curve spread with EUR/USD as of 9 Sep 2025 (Source: MacroMicro)
The European Central Bank (ECB) is expected to leave its deposit facility rate unchanged at 2% for the second consecutive policy meeting this Thursday.
Latest data from monthly implied future policy rate curves, derived from short-term interest rate futures for both the Eurozone and the US, suggest a high probability that the ECB has reached the end of its current rate-cut cycle.
The Eurozone/US implied policy interest rate curve spread has inched higher to -1.97% in October 2025, from -2.33% in September 2025, and rose steadily in the next few months to -1.62% by January 2026. Also, the curve spread has shifted upwards from three months ago (see Fig. 1).
A pause in the ECB’s rate-cut cycle, combined with expectations of an imminent Fed dovish pivot, suggests the euro is likely to continue appreciating against the greenback in the medium term.
Let’s now examine the latest technical factors on the EUR/USD to determine the next potential short-term (1 to 3 days) trajectory and its key levels to watch ahead of the ECB’s monetary policy decision and the release of the US core CPI inflation data.
Fig. 2: EUR/USD minor trend as of 9 Sep 2025 (Source: TradingView)
Preferred trend bias (1-3 days)
Maintain bullish bias with key short-term pivotal support at 1.1700 for the next intermediate resistances to come in at 1.1830 and 1.1890/1.1910 (also a Fibonacci extension cluster and the upper boundary of the minor ascending channel from 1 August 2025 low).
Key elements
- The price action of the EUR/USD has reintegrated above its 20-day moving average since last Friday, 5 September, which supports the ongoing minor bullish impulsive up move sequence.
- The hourly RSI momentum indicator has not displayed a bearish divergence condition at its overbought zone, suggesting that the short-term bullish momentum remains intact.
- The yield spread between the 2-year German Bund and the US Treasury note has continued to narrow further after its bullish breakout on Thursday, 28 August. It narrowed to a current level of -1.57% from -1.68% on last Wednesday, 3 September. This development indicates a relative decline in the yield attractiveness of the 2-year US Treasury versus its German counterpart, which in turn exerts downside pressure on the US dollar against the euro.
Alternative trend bias (1 to 3 days)
Failure to hold at the 1.1700 short-term key support negates the bullish tone on the EUR/USD to open scope for another round of minor corrective decline to expose the next intermediate support at 1.1665 (also the 20-day moving average).
A break below 1.1665 may trigger a deeper slide towards 1.1617 next.
