EURUSD: BUY 1.0495, SL 1.0445, TP 1.0580 | 05 March 2025

EURUSD:

The EUR/USD exchange rate has shown a consistent upward movement for the second consecutive session, reaching 1.0490 during Asian hours on Tuesday.The Euro (EUR) has gained strength due to an improvement in market sentiment, as the anticipation of a potential peace agreement on Ukraine has led to a decrease in demand for safe-haven assets.European leaders, in addition to Ukrainian President Volodymyr Zelensky and UK Prime Minister Keir Starmer, have reached an agreement on a structured peace plan to be presented to the United States, thereby enhancing risk appetite.

On Monday, the Bloomberg news agency reported, citing a defence official, that the United States has suspended all military aid to Ukraine.The decision was reportedly ordered by President Trump, with Defence Secretary Peter Hegseth instructed to impose the pause.Consequently, all US military equipment that has yet to reach Ukraine, including weapons in transit on planes and ships and waiting in transit zones in Poland, will be halted.

However, the euro's gains could be limited ahead of Thursday's European Central Bank (ECB) meeting, where policymakers are expected to cut the deposit rate by 25 basis points (bps) to 2.5 per cent. If the decision is confirmed, it would be the ECB's fifth consecutive rate cut, which could put pressure on the Euro.Meanwhile, mixed data on the US economy increased uncertainty in the market. The ISM manufacturing PMI fell slightly to 50.3, short of the expected 50.5 and down from January's 50.9. However, the final S&P Global Manufacturing PMI for February was higher than expected, at 52.7, suggesting resilience in the US manufacturing sector.

Trading recommendation: BUY 1.0495, SL 1.0445, TP 1.0580

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