EURUSD: SELL 1.1270, SL 1.1290, TP 1.1190 | 07 May 2025

EURUSD:

EUR/USD started the new trading week near the familiar 1.1300 mark. The Fibo is stuck in a choppy consolidation phase while Euro traders are trying to start a new spurt in either direction.

European data remains limited this week, with final Purchasing Managers' Index (PMI) data out this week unlikely to bring any surprises, while pan-European retail sales data out early Wednesday is already expected to disappoint markets, poisoning the waters and forcing traders to focus on the Federal Reserve's (Fed) key rate decision this week.

The Fed is expected to keep interest rates unchanged for now, a decision that is likely to draw further criticism from the Trump administration, which is frantically trying to get Fed Chairman Jerome Powell to cut rates as soon as possible. Labour and inflation data look largely balanced, but the White House's erratic and unclear trade policy undermines its own chances of a rate cut as the Fed stays true to its goal of controlling unemployment and price fluctuations.

While keeping the Fed Funds rate on hold this week seems almost certain, Fed Chair Powell's remarks will have additional significance for investors following Wednesday's Fed announcement. Market participants are still looking for signs of a transition to a new cycle of rate cuts, and traders will be watching for any hints of ‘restraint’ from Fed officials.

Trading recommendation: SELL 1.1270, SL 1.1290, TP 1.1190

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