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

USD/JPY. Analysis and Forecast

The Japanese yen continues to strengthen, remaining near its highest levels of 2024. This is driven by growing demand for traditional safe-haven assets amid a weakening U.S. dollar caused

Irina Yanina 12:31 2025-04-14 UTC+2

The Uncertainty Factor Will Pressure the Dollar and Support Demand for Safe-Haven Assets (There is a likelihood of further decline in USD/JPY and rising gold prices)

Global markets remain heavily influenced by Donald Trump's erratic behavior. In his attempt to pull the U.S. out of severe economic dependence on imports, Trump continues to juggle the topic

Pati Gani 09:45 2025-04-14 UTC+2

The Market Wants to, But Hesitates

Do you have a plan, Mr. Donald Trump? Some believe what's happening is masterful diplomacy — they hope that once serious proposals from other countries reach the White House, tariffs

Marek Petkovich 09:45 2025-04-14 UTC+2

What to Pay Attention to on April 14? A Breakdown of Fundamental Events for Beginners

No macroeconomic events are scheduled for Monday. However, the macroeconomic background is not of much interest to traders at the moment. At the very least, it does not drive

Paolo Greco 06:08 2025-04-14 UTC+2

EUR/USD Weekly Preview: The Show Must Go On

Last week, EUR/USD posted its strongest rally of the year, climbing from 1.0882 to a weekly high of 1.1474. A corrective pullback or consolidation phase typically follows such an impulsive

Irina Manzenko 05:37 2025-04-14 UTC+2

GBP/USD Overview. April 14: The British Pound Remains a Hostage of the Dollar

The GBP/USD currency pair also traded higher on Friday. However, it's worth noting that the British currency—once praised for its remarkable resilience against the dollar in recent years—is now rising

Paolo Greco 03:37 2025-04-14 UTC+2

EUR/USD Overview. April 14: The Dollar—From Leader to Laggard

The EUR/USD currency pair continued its steady rally on Friday. At this point, there are no more questions about what is happening in the currency market—it's as simple

Paolo Greco 03:37 2025-04-14 UTC+2

The US Dollar: Weekly Preview

There will be a few significant events in the upcoming week. Of course, reports such as industrial production, retail sales, and new home sales should be noted. At first glance

Chin Zhao 00:59 2025-04-14 UTC+2

The ECB May Cut Interest Rates Twice

The euro is showing a sharp rally against the U.S. dollar. The EUR/USD pair has already reached a three-year high and shows no signs of slowing down. Meanwhile, according

Jakub Novak 12:42 2025-04-11 UTC+2

AUD/USD. Analysis and Forecast

The AUD/USD pair is attempting to attract buyers in its rebound from the psychological level of 0.5900, marking its lowest point since March 2020. The upward momentum has managed

Irina Yanina 12:39 2025-04-11 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.