Alexander Kuptsikevich
FxPro Financial Services Limited
EURUSD is losing 1.9% from Wednesday's peak to a five-month low at 1.0650. US inflation data and ECB comments highlight the divergence of Fed and ECB monetary policy.
Wednesday's US inflation report appears to have set the trend for the dollar, taking it out of a more than four-month wander around its 200-day moving average. And the biggest contributor to this pullback is the EURUSD dynamics.
The pressure on the key currency market pair comes from several directions at once. On the US side, markets have continued to receive pro-inflationary data since the beginning of the month: acceleration in manufacturing activity, strong new job growth, and stronger CPI acceleration than expected. This data continued to push back the date of the expected Fed’s rate cut and the number of these moves.
On the European side, by contrast, data releases and comments from ECB officials are supporting the sentiment for the first cut in June. And this is a divergence that markets can no longer ignore.
The EURUSD dynamics during this week emphasise the serious bearish bias in the pair. The pair crossed the 50- and 200-day moving averages in a sharp move on Wednesday and closed well below them. Neither on Thursday nor on Friday did the Euro make any noticeable attempts to rebound.
Moreover, we don't even see the typical Friday thrust of short-term profit-taking with an ongoing sell-off. EURUSD slid to 1.0650, having fallen out of its trading range since late December.
EURUSD has been receiving support on dips towards 1.05 in 2023, spending only a few days below that level. The pair will likely test the strength of this support again very soon, and the accumulating difference in Fed and ECB policy reinforces the chances that the pair will not stop there this time.
If indeed EURUSD falls below 1.05 in April, the pair could fall to the next leg, finding support only near 0.95.
Trade Responsibly. CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.37% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. The Analysts' opinions are for informational purposes only and should not be considered as a recommendation or trading advice.
Recommended Content
Editors’ Picks
EUR/USD bounces off lows, back near 1.1330
EUR/USD meets daily support around the 1.1300 neighbourhood, managing to regain pace and revisit the 1.1330 region. Sentiment turned after President Trump proposed a “straight 50% tariff” on European imports, undermining the pair’s bullish momentum.
GBP/USD eases from tops, revisits the 1.3500 zone
GBP/USD benefits from broad US Dollar weakness, climbing to its highest level since February 2022 past 1.3500 at the end of the week. UK retail sales data surprised to the upside in April, lending extra wings to the quid.
Gold keeps the bullish tone near $3,350
Gold extends its weekly advance, trading around $3,350 per troy ounce on Friday. The rally in XAU/USD is driven by broad-based weakness in the Greenback, particulalry after President Trump’s threat to impose 50% tariffs on European imports.
Apple stock sinks below $200 after Trump threatens more tariffs Premium
Trump grows irate at Apple's move into India. President claims Apple must produce US-sold iPhone in US or face a 25% tariff. US equity futures slip more than 1% in Friday premarket after Trump threatens the EU with a 50% tariff.
Ripple Price Prediction: Whale accumulation sparks hope as rising exchange reserves signal caution
XRP sustains mid-week recovery as XRP/BTC flashes golden cross for the first time since 2017. Large volume holders increase XRP exposure, indicating rising demand and investor confidence.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.