EURUSD: BUY 1.0330, SL 1.0290, TP 1.0390 | 10 Febrero 2025

Event to pay attention to today:

16:00 EET. EUR - ECB President Christine Lagarde Speaks

EURUSD:

The EUR/USD exchange rate has experienced a decline for the third consecutive session, trading near 1.0310 during Asian trading hours on Monday. The pair is under pressure as investors anticipate an expansion in the interest rate differential between the US and the Eurozone.The US Federal Reserve (Fed) is anticipated to maintain its current interest rates throughout the year following the release of the January jobs report, which indicated a slowdown in job growth but a decline in the unemployment rate. This has exerted pressure on the EUR/USD exchange rate.In contrast, the European Central Bank (ECB) recently reduced interest rates and indicated the possibility of further easing in March.

On Friday, data from the US Bureau of Labour Statistics (BLS) revealed that non-farm payroll employment (NFP) increased by 143,000 in January, falling short of the revised December figure of 307,000 and market expectations of 170,000. However, the unemployment rate experienced a slight decline to 4% in January from 4.1% in December.

US President Donald Trump announced plans to impose 25 per cent tariffs on all steel and aluminium imports, without specifying which countries would be affected. He also said additional retaliatory tariffs would be unveiled by mid-week and would take effect almost immediately, according to the tariff rates imposed by each country, as reported by Reuters.

In response, German Chancellor Olaf Scholz stated on Sunday that the European Union (EU) could react 'within the hour' if the US imposes the proposed tariffs.Separately, Bernd Lange, head of the European Parliament's trade committee, said that to avoid a trade war, the EU was prepared to cut a 10 per cent tax on car imports to a level close to the 2.5 per cent tariff imposed by the US.

Concerns about the possibility of deflation due to anticipated US tariffs have increased the likelihood of a deeper ECB rate cut, with market predictions now indicating a deposit rate of 1.87% by December.

Trading recommendation: BUY 1.0330, SL 1.0290, TP 1.0390

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