EURUSD: SELL 1.1410, SL 1.1440, TP 1.1360 | 06 Junio 2025

An event to watch out for today:

15:30 EET. USD - Initial jobless claims

15:45 EET. EUR - ECB press conference

EURUSD:

The EUR/USD pair is trading cautiously, slightly above the key level of 1.1400 during Thursday's Asian trading session. The major currency pair is expected to remain in a sideways trend as investors await the European Central Bank's (ECB) interest rate decision.

The ECB is almost certain to cut its key lending rates by 25 basis points (bps), bringing the deposit rate and the main refinancing rate to 2% and 2.15%, respectively. This will be the ECB's seventh consecutive interest rate cut and the eighth since June last year, when it began its cycle of monetary expansion.

Traders are increasingly confident of a seventh consecutive ECB interest rate cut as deflationary trends persist in the eurozone. Preliminary data from the eurozone's harmonized index of consumer prices (HICP) released on Tuesday showed that inflationary pressure fell below the central bank's 2% target.

With the Fed widely expected to cut interest rates, investors will be watching ECB President Christine Lagarde's press conference closely for clues on likely monetary policy in the second half of the year. Market participants would also like to hear about the progress of trade negotiations with the US.

Meanwhile, the US dollar (USD) is struggling to stay near a six-week low as weak US data has reignited stagflation risks. The ISM Services PMI unexpectedly declined in May, while its components showed that production costs continue to rise rapidly. ADP employment change data, which reflects labor demand in the private sector, showed that 37,000 new jobs were created in May, the lowest figure since February 2021.

Trading recommendation: SELL 1.1410, SL 1.1440, TP 1.1360

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