The European Central Bank just did exactly what everyone was vibing with - kept the rates at a steady 2.00% 🙌, making it two pauses after chopping rates eight times before. 😅

No shocker there, but the tea is in the subtle hints and the markets playing a lil tug-o-war, making it all spicy for our EUR watchlist baddies.

Let’s peep which of our pickings got those ECB vibes working for them while the U.S. was struggling with some weak sauce data.

Watchlists are like the cheat codes for the forex grind, supported by both the brainy stuff (fundamental analysis) and tech wizardry (technical analysis), helping ya craft a lit strategy before diving into the serious biz of risk and trade management. 📈

If you’re tryna catch the vibe of our “Watchlist” picks live and in action, hop on our BabyPips Premium and become part of the squad!

The Setup

• What We Were Watching: ECB Monetary Policy Statement for September 2025
• The Expectation: ECB to keep the main refinancing rate at a chill 2.15% 😎
• Data outcome: ECB kept all the rates on freeze mode as expected, with Queen Lagarde announcing that “disinflationary vibes are over” and now risks are “more balanced”
• Market environment surrounding the event: Everyone’s feeling risky but in a good way, with weak U.S. jobless apps making Fed rate cuts a way-jay more probable; U.S. 10-year yields dipping below 4.00% like it’s nothing 💸

Event Outcome

The ECB delivered on point with expectations, keeping everything stable while dropping some hawkish undertones that had a few traders hitting the 'OMG' button. Here's what went down:

• Everyone was on board to chill the rates at 2.00% (deposit), 2.15% (refinancing), and 2.40% (lending).
• Lagarde was like, "Disinflation's soooo over," with a confident tone 😏
• Growth risks are totes “balanced” now, with trade drama “clearly diminished” 🌍
• 2025 inflation now heating up a bit to 2.1% from 2.0%, but 2027 dipping to 1.9%?
• Playing it by ear with no real promise about the next move in rate journey vibes

The statement was basically spelling out that the Euro Area’s economy is rolling forward, especially with those EU-U.S. trade deets sealed. 💼

Fundamental Bias Triggered: Bullish EUR setups are on!

Broad Market and Exogenous Drivers:

This week was a rollercoaster shaping currency flows with some serious major themes:

Early Week: Labor Market Keepin' it Real

People were digesting Friday’s yawn-worthy NFP (22k compared to 75k expected) while the French PM was ghosted out by a no-confidence vote. Meanwhile, China’s exports to the U.S. took a nosedive, plunging 33%, showing that trade wars are real wreckers. But Tuesday threw a bombshell with U.S. payroll revs diving the deepest ever -911k compared to -818k before, basically screaming for Fed rate cuts.

Mid-Week: Surprise! 🎉 Inflation and Risk Party

Wednesday saw a surprise PPI decline (-0.1% vs +0.4% was expected), unleashing a risk-taking feast and stocks were partying. Thursday was wild when jobless claims blew up to 263k - the most since October 2021, even though CPI was a bit more fiery (2.9% y/y). The market decided the Fed will focus on jobs over inflation headaches.

Friday: Reality Check and Positioning

UK’s data served a gut-punch with stagnation alerts: GDP refused to move and household inflation dreams shot up to a two-year high of 3.6%. This weighed down sterling, leaving reminders of global growth bumps. Trump’s Russia sanctions threats and tariff tantrums also heated up end-of-week geopolitical wiggles, firming up the dollar.

Gold hit a boujee high of $3,685 before folks started cashing in. Oil started strong but wobbled later, with WTI staying under $63/bbl while OPEC+'s tiny 137k bpd attempt barely scratched demand anxiety. Treasury yields took a serious nosedive into the week's data, with 10-year sinking below 4.00% for the first time since April, hyping risk assets. 📉

Meanwhile, Bitcoin closed the week as the MVP among global financial assets, with fundamental bulls hopping on thanks to Nasdaq’s big giant “tokenize securities” move earlier in the week.

Scenario Scorecard: How Did They Play Out?

EUR/CHF: Bullish EUR Event outcome + Risk-On Vibes = Odds were totally in favor of a positive vibe

EUR/CHF 1-hour Forex Chart by TradingView

The pair was hanging just under the .9350 zone before the ECB said "go", then popped a lil higher but went back 'oops reverse!' after the 'ECB event'.

The drop right after the pop was prob just folks taking some profit after Queen Lagarde's conference. Techies and risk-on peeps came in and reversed things quickly from the targeted S1 pivot/range support area discussed earlier.

The pair made a beeline back to the 0.9350 mid-range space like we thought, yet didn’t zoom further, likely coz ECB peeps were throwing mixed messages about interest rates and kept confusing everyone. It never even got close to the 0.9400 resistance that we thought might be tested if the general risk environment had been more bullish for assets.

Not Passing the Vibe Check – Bearish EUR Setups and EUR/GBP Long Setup

EUR/GBP: Bullish EUR Event outcome + Risk-Off Vibes

EUR/GBP 1-hour Forex Chart by TradingView

After we buzzed about this, it dived past the target tech zone, only finding support around the previous swing low and the S1 Pivot zone (~0.8630 – 0.8640).

Looking at the ECB event, we got strong risk-on vibes, hence not passing the Watchlist stage for EUR/GBP. But, post-ECB, the pair found some bullish day trading ops from those hard tech support layers that appeared before the event.

EUR/JPY: Bearish EUR Event Outcome + Risk-On Scenario

EUR/JPY 1-hour Forex Chart by TradingView

So, ECB’s slightly hawkish stance caught us off guard here, as Lagarde leaned towards ending the easy-money cycle soon.

EUR/JPY popped over the weekend amid Japanese political vibes, yet the gains evaporated as the announcement of a new LDP election amped up hawkish BOJ expectations. The pair tanked well ahead of the ECB event.

During our first chat, we predicted this behavior, expecting EUR/JPY to lift post-pullback. We pegged the target area of interest at where Fibs and moving averages danced (172.50 – 173.00), which is exactly where it settled going into the ECB showdown.

This turned EUR/JPY into a “Bullish EUR Event outcome + Risk-On Scenario,” and if you rode the trend, you probably experienced some decent gains as risk-on sentiment remained strong and yen got iced out at week's end. 📊✨

EUR/NZD: Bearish EUR Event outcome + Risk-Off Scenario 

EUR/NZD 1-hour Forex Chart by TradingView

Same script as EUR/JPY, we were eyeing a post-ECB comeback (if ECB is neutral-as-ice or more) into a potential bounce long on EUR/NZD in the land of rising moving averages and Fibonacci retracement connections (1.9640 – 1.9720 arena) on the 4-hour watch.

While EUR/NZD dipped into our fave tech target after the ECB spill and ECB event backed a long euro vibe, with the broad risk scene being hardcore bull (rate cut dreams escalating) and NZD flaunting muscle the whole week, a long swing bet seems low-key sketch right now. 🤷‍♂️

The Verdict

ECB’s data-first stance and hawkish vibes gave wings to bullish EUR moves, with EUR/CHF shining as our top-notch setup of the week from our crystal ball. The tech zone at 0.9320 stood its ground before the big reveal and after. Sadly, there was no legendary rally towards the upside due to ECB members tossing split takes on rates as the week wrapped up. 😬

All in all, the strategy might've supported a positive curveball if timed exactly at the tech sweet spot mentioned initially. But the success party got low-key canceled thanks to uncertainty over rate vibes late in the week thrown by ECB peeps, landing us at a “neutral-likely” level supporting a positive outcome.

Key Takeaways: