empty
14.05.2024 12:49 AM
ECB prepares markets for June rate cut. Overview of EUR/USD

The euro continues its bullish correction for the fourth consecutive week, but there is uncertainty regarding the sustainability of this movement. In the absence of economic news, the euro has not found an impetus for growth, despite the efforts of some European Central Bank representatives who have commented on recent changes in inflation, employment, and economic recovery.

The minutes of the ECB meeting published on Friday showed increased confidence that inflation is on track back to 2% and it also confirmed rate cut intentions for June. Some ECB members were ready to cut rates as early as April, but the minutes suggested a preference for June if "...additional evidence received by then confirmed the medium-term inflation outlook embedded in the March projections." If the market becomes confident in a rate cut in June, the euro will likely fall against the dollar.

This image is no longer relevant

The second estimate of GDP for the first quarter will be published on Wednesday. The initial estimate was 0.3%, marking the first quarter of growth since the second quarter of 2023 and the strongest since the third quarter of 2022. This fairly confident recovery was a surprise following a very weak 2023 (only the COVID-affected 2020 was worse). If the initial estimate does not become worse, the euro may have grounds to correct higher. Supporting a "good" scenario is the rise in April's PMI, particularly in Germany, which left the negative territory for the first time since June 2023.

The weekly change in the euro amounted to +1.5 billion, the net short position was liquidated and a cumulative long position of 0.6 billion was formed. A neutral position; a fragile equilibrium has been established after large-scale closures of long positions on the euro. However, the report marked large volumes of euro purchases for the second consecutive week. The price has moved above the long-term average.

This image is no longer relevant

A week ago, we suggested that the EUR/USD pair has a high chance of rising further. The euro is trading near the upper boundary of the bearish channel. In the absence of a clear driver, the pair traded in a sideways range last week, with the nearest resistance at 1.0810/20 holding for now. However, the chances of successfully breaking through this resistance seem to have increased. The next target is 1.0980, and we expect stronger movements to start after the release of the US inflation report on Wednesday.

Kuvat Raharjo,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/USD: Analysis and Forecast

The EUR/USD pair is attracting buyers today, breaking a three-day losing streak and attempting to build intraday momentum above the psychological 1.1300 level. This indicates a renewed interest from buyers

Irina Yanina 11:59 2025-05-02 UTC+2

U.S. Labor Market Data Could Be a Major Disappointment

Employment growth in the U.S. likely slowed in April, although the unemployment rate is expected to remain unchanged, pointing to healthy but moderate demand for labor. However, the Trump administration's

Jakub Novak 10:08 2025-05-02 UTC+2

The ECB Has No Other Choice

The European currency continues to lose ground against the U.S. dollar as traders increasingly place bets on the European Central Bank's upcoming monetary policy decisions. According to data, the chances

Jakub Novak 10:03 2025-05-02 UTC+2

China Has Finally Responded

The euro, the pound, and other risk assets reacted with gains following statements from Chinese authorities that they are assessing the possibility of trade negotiations with the United States—marking

Jakub Novak 09:57 2025-05-02 UTC+2

The Process Has Begun. China Is Ready for Trade Talks (There's a Chance of Renewed Decline in Gold and EUR/USD Prices)

Trading on the last day of the week is unfolding positively. News that China is ready to begin negotiations has inspired investors to buy risk assets and weakened the U.S

Pati Gani 09:43 2025-05-02 UTC+2

The Market Enters Turbulent Waters

The market is confident that tariffs won't materialize or that companies can pass them on to customers. The S&P 500's eight-day rally—its longest since August—strongly hints at this. So does

Marek Petkovich 09:24 2025-05-02 UTC+2

What to Pay Attention to on May 2? A Breakdown of Fundamental Events for Beginners

Only a few macroeconomic events are scheduled for Friday, but some are quite significant. Naturally, the focus is on the U.S. NonFarm Payrolls and unemployment rate, yet it's also important

Paolo Greco 09:14 2025-05-02 UTC+2

GBP/USD Overview – May 2: The U.S. Dollar Didn't Rise for Long

On Thursday, the GBP/USD currency pair continued to decline. The dollar had strengthened for three consecutive days—despite having no objective reason. U.S. macroeconomic data has been consistently weak; there were

Paolo Greco 03:50 2025-05-02 UTC+2

EUR/USD Overview – May 2: The Dollar Faces a New Collapse – And It's Far from the Last

On Thursday, the EUR/USD currency pair once again traded relatively calmly, but the U.S. dollar failed to show any meaningful growth this time. A little bit of good news goes

Paolo Greco 03:47 2025-05-02 UTC+2

USD/JPY: A Rough Patch for the Yen

At its latest meeting, the Bank of Japan kept all key policy settings unchanged, effectively implementing the most expected baseline scenario—despite earlier conflicting statements from central bank officials

Irina Manzenko 01:19 2025-05-02 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.