The Euro has been exhibiting a mixed performance recently. The European Central Bank opted to cut its Rate on Deposit Facility by 25 basis points to 3.50%, a move that was largely anticipated. However, the ECB refrained from outlining a clear path for future rate cuts, introducing a layer of uncertainty into the market.

ECB President Christine Lagarde emphasized a data-dependent approach moving forward, stating that interest rate decisions will hinge on incoming economic indicators and the dynamics of underlying inflation. This cautious stance suggests that while the ECB is nearing the end of its tightening cycle, it's not committing to a predefined rate-cut trajectory.

Adding to this, ECB Governing Council member Joachim Nagel expressed optimism about the inflation outlook, projecting a return to the 2% target by the end of next year. Despite this positive sentiment, concerns linger, particularly regarding Germany's economic outlook. Structural issues such as exposure to China's economy, the global manufacturing slowdown, and demographic challenges are raising recession fears.

The EUR/USD pair has extended its gains, driven by speculation that the Federal Reserve might kick off an aggressive policy-easing cycle. The US Dollar Index, which measures the greenback against a basket of currencies, has slipped toward the 100.50 level:

Recent data indicates that US producer inflation is cooling, rising just 1.7% year-over-year—below both the previous month’s reading and market estimates. This slowdown suggests waning demand, possibly due to diminished household purchasing power in a high-interest-rate environment.

Market sentiment is increasingly leaning toward the possibility of the Fed reducing interest rates in its upcoming meeting. Concerns about the labor market's health and confidence in inflation returning to the 2% target are fueling these expectations.

The Pound Sterling is showing robust performance against major currencies, bolstered by improved risk sentiment and a softer US Dollar. Traders are keenly awaiting the UK's Consumer Price Index data and the Bank of England's (BoE) monetary policy decision.

Economists anticipate that the UK's core CPI, which strips out volatile components, will rise to 3.5% from 3.3%, with headline inflation increasing steadily by 2.2%. Persistent service sector inflation remains a focal point for the BoE, as it significantly influences monetary policy decisions.

Currently, market participants largely expect the BoE to keep interest rates unchanged at 5%. However, the forthcoming inflation data could sway expectations, potentially impacting the GBP/USD pair, which is trading near the 1.32 mark.

From a technical analysis perspective, the GBP/USD pair is exhibiting bullish tendencies. After a corrective phase, it's rebounding from a horizontal level of 1.30—a level that previously acted as a key resistance barrier. Additionally, the 20-day Exponential Moving Average near 1.3080 is providing solid support to the current rise: