EURUSD: BUY 1.1310, SL 1.2750, TP 1.1420 | 05 May 2025

Event to watch out for today:

15:30 EET. USD - Non-Farm Payrolls

EURUSD:

The EUR/USD pair attracted moderate buying interest during the Asian trading session on Friday and is showing a desire to consolidate above the psychologically important 1.1300 level. At the moment, spot quotes seem to have broken a three-day series of declines, reaching a two-week low near 1.1265 recorded on Thursday, amid repositioning of market participants awaiting the publication of key macroeconomic indicators from the Eurozone and the US.

Representatives of the European Central Bank (ECB) earlier expressed concern over the risks of lower inflationary pressures in the region. In this regard, market participants are waiting with special attention for the preliminary data on the consumer price index (CPI) in the eurozone. Indicators that turned out to be lower than forecasts may strengthen expectations of the ECB key interest rate reduction by 25 basis points following the results of the meeting in July. Such a development could put pressure on the single European currency and contribute to the resumption of the EUR/USD corrective movement from the level of 1.1575 - the maximum since November 2021, recorded last month.

In the United States of America, investors' attention is focused on the upcoming Non-Farm Payrolls report (NFP), according to forecasts of which the US economy could create only 130 thousand new jobs in April, which is significantly lower than the March value of 228 thousand. At the same time, the unemployment rate, according to preliminary estimates, will remain at 4.2%. These data may have a significant impact on expectations of further monetary policy steps by the Federal Reserve (Fed), which, in turn, will affect the dynamics of the US dollar and determine the short-term trajectory of EUR/USD.

Additionally, the persistent expectations of a looser monetary policy of the Federal Reserve System (FRS) restrain the potential for strengthening of the US dollar, despite its three-day rise to local highs. In particular, market participants have increased expectations for four 25 basis point interest rate cuts before the end of this year, after recently released statistics pointed to an unexpected contraction in US GDP - for the first time since 2022. As a result, the dollar bulls' positions remain limited, which provides support to the EUR/USD pair.

Trading recommendation: BUY 1.1310, SL 1.2750, TP 1.1420

Up to $20 for each lot in real money - get a guaranteed income by connecting Cashback promotion!