EURUSD poised for decline on technical overheating

EURUSD shows moderate growth on Wednesday, recovering some of the losses after two sessions of decline. The pair's recovery is supported by an improvement in global risk sentiment. One of the drivers was US President Donald Trump's decision to temporarily exempt key technological goods from new reciprocal tariffs. This temporarily reduced global trade tensions.

However, the potential for further euro growth is limited by anticipated monetary easing by the European Central Bank (ECB). The financial regulator is likely to lower its key interest rate by 25 basis points on Thursday, marking the third cut in 2025. If the forecast is realized, the deposit rate will fall from the current 2.5% to 2.25%, reflecting growing concerns about a slowdown in the eurozone economy amid foreign trade risks.

ECB head Christine Lagarde's comments at a press conference after the meeting may cause additional volatility. Investors will be looking for signals regarding further course of monetary policy amid persistent tariff threats from the US.

As for the dollar, attention is focused on the upcoming release of US retail sales data for March. The report may clarify the state of consumer demand amid continued uncertainty in the economy.

Technical analysis shows that EURUSD is trading inside the ascending channel on the H4 timeframe. At the moment the middle line of the channel is being tested. The pattern is marked by candlesticks with small bodies and long upper shadows, which indicates a weakening in buying activity.

On the H1 chart, the wave structure shows the transition from the third ascending wave to the fourth corrective wave, confirming the momentum is fading. The MACD histogram (with default parameters) remains below zero, reinforcing the signal in favor of the development of the bearish phase.

Signal:

Short-term prospects for EURUSD suggest selling. 

The target is at the level of 1.1140.

Part of the profit should be taken near the level of 1.1250.

A stop-loss could be placed at the level of 1.1490.

The bearish scenario is short-term, so trade volume should not exceed 2% of your balance.