EURUSD: BUY 1.1350, SL 1.1280, TP 1.1475 | 23 May 2025

Events to pay attention to today:

15:30 EET. USD - Unemployment Claims

16:45 EET. USD - Services PMI

EURUSD:

The EUR/USD exchange rate is currently holding near 1.1340, which is close to the two-week high reached during Asian trading hours. The Euro (EUR) has continued to perform well for the fourth consecutive session ahead of the release of the Eurozone Purchasing Managers' Index (PMI) from HCOB, which is scheduled for release later today. Preliminary estimates suggest that overall business activity may have expanded at a faster pace in May than in April.

The US Dollar (USD) is continuing to weaken due to a decline in market confidence in the United States (US). Traders are likely to monitor the US Purchasing Managers' Index (PMI) data from S&P Global, scheduled for release on Thursday. Overall business activity is expected to grow at a steady pace in May.

Moody's downgraded the US credit rating to Aa1 from Aaa, following similar downgrades by Fitch Ratings in 2023 and Standard & Poor's in 2011. Moody's has also predicted that by 2035, US federal debt will rise to 134% of GDP, up from 98% in 2023, and the budget deficit will increase to nearly 9% of GDP. This deterioration is attributed to rising debt service costs, expanding entitlement programmes and declining tax revenues.

The House Rules Committee has approved the bill for a substantial tax cut proposed by US President Donald Trump. The House Rules Committee has announced that the vote on Trump's tax cut bill will take place imminently.

Trading recommendation: BUY 1.1350, SL 1.1280, TP 1.1475

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