• EUR/USD jumps 1.16% to 1.1582 after bouncing from lows near 1.1440.
• ECB holds rates but signals possible hike discussions as soon as April.
• DXY slides over 1% to 99.21 despite strong US jobless claims data.

EUR/USD reverses course and rises by more than 1.16% after the European Central Bank (ECB) held rates unchanged, while a leaked source revealed that policymakers are ready to discuss rate hikes as soon as April. In the US, the Federal Reserve (Fed) kept rates steady while the Fed Chair Jerome Powell struck a neutral-to-hawkish tone at his press conference.

Euro rebounds sharply on hawkish ECB whispers and broad US Dollar weakness

The pair trades at 1.1582 after bouncing off daily lows near 1.1440. Broad US Dollar weakness and policymakers' concerns about the Middle East conflict could prompt discussions of a rate hike as soon as April, according to three sources speaking with Reuters.

The Eurozone's import-intensive nature keeps ECB policymakers worried amid a spike in Oil and Natural Gas prices, which exert upward pressure on energy prices. Consequently, the ECB kept its deposit facility rate at 2%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40%, all three unchanged.

In the monetary policy statement, they acknowledge that “The war in the Middle East ... will have a material impact on near-term inflation through higher energy prices.” They added that "Its medium-term implications will depend both on the intensity and duration of the conflict and on how energy prices affect consumer prices and the economy."

At the press conference, ECB President Lagarde commented that the Eurozone is resilient and that low inflation means policy is “well positioned” to deal with external shocks “unfolding.” She added that the central bank is taking a meeting-by-meeting approach and stressed that it is data-dependent in deciding the path of interest rates.

In the US, Initial Jobless Claims for the week ending March 14 failed to boost the Greenback, which, according to the US Dollar Index (DXY), is down more than 1% at 99.21. Jobless claims dipped from 213K to 205K, below economists' forecasts for a 215K rise.

Other data revealed that New Home Sales in January fell -17.6% MoM, following December’s -1.7% contraction, mostly due to snowstorms, which drove the decline.

Given the backdrop, US Treasury yields along the curve are retreating, after spiking on the US data release. Nevertheless, money markets do not expect the Fed to lower rates throughout 2026, according to Prime Market Terminal.

Ahead this week, the Eurozone docket will feature the Eurozone Current Account, the Balance of Trade, and Germany’s Producer Price Index (PPI) data. In the US, the schedule is absent, yet geopolitical developments involving the US would dictate the US Dollar’s fate.

EUR/USD Price Forecast: Technical outlook

In the daily chart, EUR/USD trades at 1.1585. The near-term bias is mildly bearish as price holds just below the clustered simple moving averages around 1.1730, keeping spot positioned under its medium-term balance zone. The recent break under the descending resistance trend line from 1.2086 has not translated into sustained upside, instead exposing the pair to renewed selling pressure beneath that former cap. RSI at 45.65 remains below the 50 midline, confirming weak momentum and favouring further downside while rallies stall under the moving average area.

Initial resistance emerges at 1.1636, where recent recovery attempts failed, followed by the moving average band near 1.1730, which guards a stronger barrier at 1.1820. A daily close above this latter region would be needed to negate the current bearish tone and open the way toward 1.1900. On the downside, immediate support is located at 1.1567, ahead of 1.1512, with a break lower exposing the 1.1417 area. A slide through 1.1417 would confirm an extension of the downtrend and shift focus toward deeper supports below 1.1400.

(The technical analysis of this story was written with the help of an AI tool.)