EURUSD: SELL 1.1320, SL 1.1340, TP 1.1230 | 06 May 2025

Event to pay attention today:

17:00 EET. USD- ISM Services Business Activity Index from ISM

EURUSD:

EUR/USD started the week on a weak note, trading near 1.1320 during the Asian session on Monday. US President Donald Trump confirmed that he will not seek the resignation of Federal Reserve (Fed) Chairman Jerome Powell before his term ends in May 2026. Although Trump criticised Powell, calling him a ‘total tightwad’, he reiterated that interest rates should eventually be lowered.

Additionally, EUR/USD faces headwinds from potential trade tensions. Trump announced plans to instruct the US Trade Representative and the Department of Commerce to begin the process of imposing 100 per cent tariffs on foreign-made films.

On the data side, the US Non-Farm Payrolls (NFP) report showed a larger than expected 177,000 increase in jobs in April, following a revised increase of 185,000 in March. This exceeded the market forecast of 130,000. The unemployment rate remained unchanged at 4.2% and average hourly earnings remained at 3.8% year-over-year. Later in the day, traders will keep an eye on the US ISM services PMI from the ISM.

The Euro found some support on Friday after stronger than expected Eurozone inflation data. The harmonised consumer price index held steady at 2.2% year-on-year in April, slightly above the 2.1% forecast. Services inflation accelerated to 3.9% and core inflation (excluding food and energy) rose to 2.7%, above expectations. The data reinforced market expectations for a cumulative 60 basis points (bps) cut in European Central Bank (ECB) rates by the end of the year.

Trading recomendation: SELL 1.1320, SL 1.1340, TP 1.1230

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