EURUSD: BUY 1.1330, SL 1.1280, TP 1.1420 | 22 May 2025

EURUSD:

EUR/USD caught a rebound for the second day in a row on Tuesday, which helped the pair return to 1.1300. Despite short-term bullish momentum supporting fibo, EUR/USD remains far from recent multi-year highs near 1.1575. The pair has found a solid technical bottom near key moving averages and the overall market sentiment remains hopeful that traders can continue to find reasons to press the buy button.

European policymakers are currently busy with G7 meetings, minimizing the flow of noteworthy headlines from key EU decision makers. Overall market sentiment remains entirely dependent on trade news headlines from the US. Investors are hopeful that deals will be struck with the Trump administration that will encourage President Donald Trump and his staff to pull the tariff gun away from the head of their own economy. Despite the overall optimistic tone in global markets, the constant drift into the unknown is beginning to limit bullish sentiment. The Trump administration is rapidly approaching the self-imposed 90-day deadline to pass its “retaliatory tariff” package. While some potential trade deals have been announced, nothing concrete has emerged.

There will be little data on Wednesday, with only averages on both sides of the Pacific. On Thursday, mixed US purchasing managers' index (PMI) data is expected. The US manufacturing PMI for May is expected to decline to 50.1 from 50.2, while the services component is expected to remain unchanged at 50.8.

Trading recommendation: BUY 1.1330, SL 1.1280, TP 1.1420

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