Today’s EUR/USD forecast is slightly bearish. On Thursday, two European Central Bank policymakers expressed contrasting opinions regarding the extent of the ECB’s upcoming rate increases, indicating some conflict over whether last week’s massive hike should be repeated.

To combat record-high inflation, the ECB increased rates by an unprecedented 75 basis points last week, and President Christine Lagarde hinted at additional two or three increases at the upcoming meetings.

However, on Thursday, Mario Centeno, governor of Portugal’s central bank, and Luis de Guindos, vice president of the ECB, appeared to disagree over the size of the upcoming changes.

De Guindos echoed Lagarde’s description of last Thursday’s hike by saying the ECB should continue to take “determined action.”

Centeno, however, argued that to avoid causing destabilization to the economy, the central bank should raise rates in “as small steps as possible.”

“Monetary policy must remain predictable and act at the margin in as small steps as possible,” Centano said.

After these comments, EUR/USD has been consolidating with no clear direction as traders anxiously await eurozone inflation data for more clues on ECB’s next hike.

EUR/USD Key Events Today

Investors will pay attention to inflation data from the eurozone. A lot of weight is placed on this data as it will significantly impact the ECB’s monetary policy.

EUR/USD Technical Forecast: Downtrend Likely To Continue

(Click on image to enlarge)

The 4-hour chart shows the price consolidating below the 30-SMA and the RSI trading below 50. This is a sign that bears are in charge. The price is trading around parity, where bulls have tried to take over miserably. The attempts to push the price above parity are weak and do not look like they will succeed.

Bulls are experiencing resistance from the 1.0000 critical psychological level, and the 30-SMA is not too far. On the other hand, bears made a strong move that pushed the price below parity, and all they need now is to continue after a short consolidation. If bears resume the downtrend, the price will likely retest support at 0.9901. A break below this support level will create a lower low that will confirm the downtrend further.

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