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02.05.2025 11:59 AM
EUR/USD: Analysis and Forecast

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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 amid a slight repositioning ahead of crucial economic releases from the Eurozone and the U.S.

Officials from the European Central Bank have expressed concern about declining inflation in the Eurozone. The anticipated preliminary Consumer Price Index (CPI) will serve as a critical indicator. If the data comes in below expectations, it could reinforce forecasts of a 25-basis-point rate cut in July, which would put pressure on the euro and pave the way for a continuation of EUR/USD's recent pullback from the 1.1600 level — the highest level since November 2021 — reached last month.

On the U.S. side, the Nonfarm Payrolls (NFP) report is expected to show an increase of 130,000 jobs in April, significantly lower than previous readings. Unemployment is likely to remain at 4.2%. These figures could reshape market views on the Federal Reserve's policy outlook, subsequently impacting the U.S. dollar's price dynamics and providing meaningful momentum to EUR/USD.

Considering the outlook for more aggressive easing from the Fed, the dollar is weakening. In fact, traders have increased their bets that the U.S. central bank will cut rates by 25 basis points four times by the end of the year, following data released this week showing that the U.S. economy unexpectedly contracted for the first time since 2022. This is discouraging dollar bulls from initiating new long positions and is seen as a tailwind for EUR/USD.

From a technical perspective, if the pair manages to hold above the 1.1300 mark and break through the next resistance around 1.1350, it could gather strength to reach the next psychological level of 1.1400—signaling potential for further upside. Conversely, if the data proves negative for the euro or positive for the dollar, the pair could retreat to lower levels such as 1.1250 and 1.1200.

However, as long as oscillators on the daily chart remain in positive territory and haven't shifted into negative zones, there is still hope for the continuation of EUR/USD's uptrend initiated earlier this year.

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