EUR/USD Rallies from 2025 Uptrend After ECB, U.S. Inflation Release

EUR/USD is trading higher on Thursday morning in the wake of the September European Central Bank (ECB) rate decision as well as the dual U.S. data releases, weekly jobless claims and the August U.S. consumer price index (CPI). From the ECB, upgrades to growth and inflation targets are helping reduce cut odds on the Euro’s side. While headline U.S. inflation was a bit warmer on the monthly reading (+0.4% vs +0.3% expected), traders seem more concerned with the jump in initial claims (263K vs 236K expected). The U.S. 10-year yield dropped below 4% for the first time since April. 

In the above chart, EUR/USD rates are displaying signs of a meaningful rebound from a technical perspective. The pair rallied off uptrend support that has defined price action since the start of 2025, as well as the 50-day exponential moving average (EMA). Candlestick analysis likewise suggests that a bullish reversal is transpiring. A bullish key reversal is forming, with Thursday’s low exceeding Wednesday’s low; a close today above yesterday’s high would mark the reversal candle.

EUR/USD rates fell back into their multi-week trading range that’s been carved out since the beginning of August. The range, broadly speaking, from 1.16 to 1.1750, has potentially been part of a months-long topping process that the pair has been undergoing. A reversal back into the range suggests a return to the other side; support comes in play at 1.16, both in the form of the range low and the uptrend from the February, March, and August swing lows.