EUR/USD Slides as Fed-ECB Policy Divergence Widens Further

EUR/USD continues to face downward pressure as the growing monetary policy divergence between the Federal Reserve and the European Central Bank weighs heavily on the pair. The Fed's hawkish stance, driven by persistent inflation and resilient US economic data, contrasts sharply with the ECB's more accommodative approach, where rate cuts have already been initiated to support a flagging Eurozone economy. Germany's 10-year Bund yields remain subdued relative to US Treasury yields, reinforcing the interest rate differential that favors dollar strength. Brent crude oil movements are adding another layer of complexity, as energy price fluctuations impact Eurozone inflation expectations and trade balances differently than the US. Traders should monitor upcoming Fed and ECB communications for any shifts in forward guidance. Key support for EUR/USD lies near recent lows, while resistance remains capped by the widening yield spread. The pair is likely to remain under selling pressure unless Eurozone data surprises to the upside or US economic momentum shows signs of cooling.