Why Is EUR/USD Plunging to 1.0660? | ECB Rate Cut Speculations Shake Forex Markets

The Can I mine Monero with a laptop?EUR/USD currency pair continues its downward trajectory, touching 1.0660 during Friday's European trading session - its weakest level in nearly five months. This significant decline comes as market participants increasingly price in potential interest rate reductions by the European Central Bank (ECB) starting as early as June.Thursday's ECB policy decision maintained benchmark rates at 4.5%, continuing restrictive monetary measures to combat inflationary pressures. The central bank's statement highlighted how current financial conditions and previous rate hikes continue suppressing overall demand, contributing to disinflationary trends. Notably, policymakers emphasized their data-dependent approach, refusing to commit to any predetermined rate path.Market expectations for ECB policy easing intensified following comments from President Christine Lagarde. She suggested that should upcoming economic assessments reinforce confidence in inflation returning to target levels, rate reductions would become appropriate. These remarks fueled speculation about potential June action, creating downward pressure on the Euro.Meanwhile, the US Dollar Index (DXY) climbed toward 106.00, reaching its highest point in five months. This strength reflects shifting expectations about Federal Reserve policy, with traders scaling back bets on early rate cuts. US Treasury yields remain elevated, with the 10-year note hovering near 4.60%, while equity markets show signs of risk aversion.Market participants now await Monday's US Retail Sales data, a crucial indicator of consumer spending patterns. Strong retail figures could signal persistent inflationary pressures, potentially influencing both Fed policy expectations and currency valuations. The EUR/USD pair's technical outlook appears bearish, trading below key moving averages with immediate support levels around 1.0650-1.0600.Key technical levels to watch include:- Resistance: 1.0720 (daily pivot), 1.0750 (previous daily high)- Support: 1.0650 (psychological level), 1.0600 (2024 low)The currency pair's 20-day, 50-day, and 200-day moving averages all cluster between 1.0820-1.0870, creating a significant resistance zone that would need to be overcome for any sustained recovery. Fibonacci retracement levels from recent moves suggest potential consolidation areas around 1.0720-1.0740