EURUSD: SELL 1.1320, SL 1.1340, TP 1.1230 | 09 May 2025

Event to pay attention today:

15:30 EET. USD - Number of Initial Jobless Claims

EURUSD:

EUR/USD held average trends on Wednesday, consolidating near the 1.1300 mark after the latest Federal Reserve (Fed) meeting went about as well as traders expected, albeit with a fresh batch of ‘wait and see’ warnings from Fed Chairman Jerome Powell. The economic calendar on the European side remains strictly average this week, leaving Fiber traders to sit back and chew on an increasingly cautious Fed.

Powell: The right thing to do is to wait for further clarity

The Fed's recent rate announcement underscores that while U.S. employment and economic activity remain strong, concerns about labour and output growth risks have intensified, largely due to uncertainty surrounding tariffs and U.S. trade policy. Fed officials' concerns about economic risks raised market expectations of an imminent rate cut, which temporarily pushed EUR/USD higher.

However, after a press briefing by Fed Chairman Jerome Powell, market sentiment declined. He emphasised that if US trade tariffs persist, they will hinder the Fed's inflation and employment targets for the rest of the year.

According to CME's FedWatch tool, market participants still expect a quarter-point rate cut in July. However, the probability that rates will remain unchanged in July has risen to 30%, weakening widespread market expectations of a smooth transition to a new cycle of rate cuts.

Trade recommendation: SELL 1.1320, SL 1.1340, TP 1.1230

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