EUR/USD Holds Two-Week High at 1.1640 Ahead of ECB Decision

EUR/USD is consolidating near a two-week high around 1.1640 as traders position for the ECB's rate decision. Markets have largely priced in a 25-basis-point hike that would lift the deposit rate to 2.50%, leaving the real swing factor to be Christine Lagarde's forward guidance rather than the move itself.

Energy prices have been climbing again, reviving inflation concerns across the eurozone and fueling speculation that the ECB may need to extend its tightening cycle beyond this meeting. Any hawkish tilt in the press conference language could push EUR/USD through resistance and extend the pair's recent recovery.

Conversely, a cautious tone acknowledging growth risks could trigger quick profit-taking, since much of the hike is already baked into current pricing.