Despite the fact that more and more ECB policymakers are advocating for a restrictive approach to interest rates, the euro is not benefiting from it.

In an interview, European Central Bank Governing Council member Jose Luis Escriva stated that at present policymakers are not inclined to cut interest rates and could just as well raise them instead.

According to Escriva, the current economic situation in the eurozone is still marked by uncertainty, and although inflationary pressure shows signs of easing, it remains significant. Under these conditions, in his view, cutting rates could prove premature and risky, potentially triggering a new wave of inflation. Escriva's argument in favor of a possible rate hike seems even more radical. He links it to the need to further curb inflation expectations and protect the purchasing power of the euro. Such a tough stance is clearly aimed at demonstrating the ECB's commitment to its primary goal — maintaining price stability.

The head of the Bank of Spain stressed that the current stance does not rule out movement either upward or downward. "Full optionality means full optionality, not reduction," Escriva said. "The Council concluded that everything is balanced, and we meet and make decisions at every meeting. And I don't see in any ECB statement any hints that a cut is more likely than movement in the opposite direction."

The European Central Bank is expected to keep lending rates unchanged at its next meeting on October 30. Chief Economist Philip Lane noted this week that although he does not see the need to act right now, the potential options for policymakers are either to maintain the pause or to cut.

Bank of France Governor Francois Villeroy de Galhau pointed out that the possibility of further cuts cannot be ruled out, while his Finnish colleague Olli Rehn said in a podcast that "the current situation is good," but "downside inflation risks are visible."

Although ECB officials overall forecast inflation around the 2% target, the latest data came in even higher, reaching a five-month high of 2.2%.

As for the current technical outlook for EUR/USD, buyers now need to focus on reclaiming the 1.1590 level. Only this will allow for a test of 1.1630. From there, it may be possible to climb toward 1.1660, but doing so without the support of large players will be rather difficult. The furthest target would be the 1.1690 high. In case of a decline of the trading instrument, I expect any serious activity from major buyers only around 1.1570. If no one steps in there, it would be better to wait for a retest of the 1.1540 low or to consider long positions from 1.1500.

As for the current technical outlook for GBP/USD, buyers of the pound need to break through the nearest resistance at 1.3310. Only then can the pair aim for 1.3340, above which further progress will be quite problematic. The furthest target would be the 1.3635 level. In case of a decline, the bears will try to take control at 1.3280. If they succeed, a breakout of the range will deal a serious blow to the bulls' positions and push GBP/USD toward the 1.3350 low with a prospect of reaching 1.3215.