While everyone remains focused on how the story between the U.S. and China will unfold, European Central Bank (ECB) President Christine Lagarde stated that the regulator has already determined its inflation target and expects an economic revival in 2026.
"Inflation remains close to our 2% target," Lagarde said, adding that core price pressures also persist and that wage growth is expected to continue slowing. Addressing lawmakers, she noted that weak export figures — driven by high tariffs, a stronger euro, and intensifying global competition — are likely to hold back economic growth until the end of this year.
These comments came amid growing concerns about slowing economic growth in the euro area. Despite success in containing inflation, the obstacles to recovery remain substantial. High energy prices, geopolitical tensions, and uncertainty in global trade continue to create a challenging environment for businesses and consumers alike.
The European Central Bank is under pressure as it tries to balance supporting economic growth with keeping inflation under control. ECB policymakers have repeatedly affirmed their commitment to achieving the 2% inflation target, while also acknowledging that tightening monetary policy too aggressively could harm the economy.
Under these conditions, the outlook for the eurozone remains uncertain. Improvement in the global economic situation seems unlikely in the near term, and new trade disputes could further undermine the region's future prospects.
"The impact of these factors on growth should ease next year," Lagarde said. "Survey data indicate that the services sector continues to expand, suggesting some positive underlying momentum in the economy."
Most policymakers, including Lagarde herself, have recently expressed their reluctance to lower borrowing rates below the current 2% level, as inflation hovers near target and the risks appear balanced in both directions.
"If you look at my inflation forecast, the balance of risks, and core inflation, as I have said many times before — we are in a good position," the ECB president said.
Lagarde reiterated the ECB's official stance that policy decisions will continue to be data-dependent, with no pre-commitments regarding future actions.
Current Technical Outlook for EUR/USD
At present, buyers need to focus on reclaiming the 1.1630 level. Only a breakout above this mark would allow a move toward 1.1660. From there, the pair could climb to 1.1690, although doing so without the support of major players would be quite difficult. The ultimate upward target remains 1.1720. In the event of a decline, significant buying interest is expected to appear around 1.1590. If no large buyers emerge there, it would be prudent to wait for a retest of the 1.1545 low or consider opening long positions near 1.1510.
Current Technical Outlook for GBP/USD
Buyers of the pound should aim to break the nearest resistance at 1.3360. Only this will open the path toward 1.3390, though breaking above that level could prove difficult. The farthest upward target is the 1.3425 level. If the pair falls, bears will likely try to regain control near 1.3330. If they succeed, a break below this range would deal a serious blow to the bulls and push GBP/USD toward the 1.3290 low, with the potential to extend losses to 1.3260.
