EUR/USD Bearish Below 1.16 as ECB Softens, Fed Rate Cut Hopes Fade

EUR/USD has declined to test support near 1.1600, pressured by diverging central bank outlooks and shifting rate expectations. The European Central Bank's increasingly dovish stance contrasts with the Federal Reserve's hawkish positioning, as markets scale back expectations for US rate cuts in 2026. Technical analysis shows bears have gained control below the 1.1600 psychological level, with momentum indicators pointing to further downside potential. The pair faces immediate support at 1.1580, followed by the 1.1550 zone. Resistance now sits at 1.1620-1.1630. The week ahead features a packed economic calendar including Eurozone inflation data and US retail sales figures, which could determine whether the bearish momentum extends toward 1.1500. Traders should monitor ECB officials' speeches for any clarification on the pace of potential rate cuts, while US economic resilience continues to support dollar strength across major pairs.