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No rate cut for now, ECB sticks to patience
The European Central Bank on 27 November 2025 underscored its reluctance to rush into further rate cuts, even as some signs of economic easing have emerged. The easing cycle appears to be on pause, among investors, expectations for further rate reductions have fallen sharply with only about a 20% chance of cuts in 2026.
Council still divided over how quickly interest rates should come down.
Policymakers want to make sure inflation is on a durable path toward the 2% target before fully committing to easing.
EUR/USD remains locked in a cautious consolidation.
ECB Minutes rate cuts are coming
Inflation has cooled off its peak and growth across the euro zone remains fragile, policymakers are far from united when the easing cycle should truly begin.
For markets that had been hoping for a clear signal toward imminent rate cuts, the message was more cautious cuts are on the table, but the timing remains highly uncertain.
Behind closed doors, the debate is no longer about whether rates will be reduced but how fast the ECB can safely move without reigniting inflation.
Divided teams inside the ECB
One group of policymakers remains concerned that underlying inflation pressures have not fully disappeared, services inflation remains elevated, wage growth is still strong in parts of the region, and energy prices remain vulnerable to geopolitical shocks coming from Russia. This camp argues that cutting rates too early could undo much of the progress made over the past two years in inflation.
Another group is worried about the economic cost of keeping policy too tight. Weak manufacturing data, slowing consumer demand, these members believe the ECB risks overtightening if it waits too long. Policymakers made it clear in the minutes that they need more evidence that inflation is on the path toward the 2% target before fully committing to easing. Until then, every inflation print and wage report will continue to carry outsized weight in shaping expectations.
Technical outlook
From a technical perspective, EUR/USD remains locked in a cautious consolidation as traders weigh delayed rate cut expectations against slowing growth.
The pair is still under short-selling pressure, 1.18331 has acted as a key resistance area over recent weeks. As long as this level remains unbroken, the short-term structure stays bearish.
On the other hand, the first important zone to keep it unbroken is the support near 1.1398, followed by the psychological 1.10582 level. A clean break above 1.10582 could open the door toward the 1.0600–1.0400 region, where sellers are likely to re-emerge. For now, EUR/USD remains range-bound, with directions likely to come from the next major inflation number or a clearer signal from the ECB on the timing of rate cuts.
Source: Trading View
