EURUSD – Up
Event to watch out for today:
15:30 GMT+3. USD – Durable Goods Orders
EURUSD:
The Euro-dollar pair continues to decline around 1.0808 in the early European session on Friday. The US Dollar (USD) recovery, supported by stronger US PMI data, is pulling the major pair down. German gross domestic product (GDP) data for the first quarter (Q1) is due out on Friday. Quarterly GDP is forecast to rise by 0.2% quarter-on-quarter, while annual GDP is forecast to contract by 0.2% quarter-on-quarter.
The dollar gained on the back of favorable economic data from the U.S. released on Thursday. The S&P Global Flash US Purchasing Managers‘ Composite Index (PMI) for May rose to 54.4 in May from 51.3 in April, the highest reading since April 2022. Meanwhile, the manufacturing PMI rose to 50.9 in May from 50.0 in April. The services PMI rose to 54.8 in May from the previous reading of 51.3. Both indicators were above the market consensus. In addition, weekly initial jobless claims for the week ending May 18 fell to 215k from 223k the previous week, below the forecast of 220k.
Moreover, speculation is growing that the European Central Bank (ECB) will start cutting interest rates ahead of the Fed, putting pressure on the Euro. ECB President Christine Lagarde said she is “really confident” that Eurozone inflation is under control and an interest rate cut is possible next month. According to LSEG, financial markets are currently pricing in a 25 basis points (bps) rate cut in June.
Trading recommendation: Trade predominantly on Sell from the current price level.
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