- The ECB’s Stournaras said on Friday that there might only be three ECB rate cuts this year.
- Eurozone economic growth beat forecasts in Q1.
- The dollar was heading for its worst week in two months.
The EUR/USD price analysis shows bullish momentum as the euro gains strength on moderately less dovish ECB policy remarks. At the same time, the dollar is set for its worst week in two months, with all eyes on the upcoming US employment report.
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On Friday, ECB policymaker Yannis Stournaras said there might only be three ECB rate cuts this year. According to him, inflation is likely to remain high given recent upbeat economic data. Eurozone economic growth beat forecasts in Q1, which could lead to an increase in price pressure. However, the ECB is set to implement its first rate cut well ahead of the Fed in June. Therefore, the longer-term outlook for the euro remains bearish. Moreover, three rate cuts are much more than a possible single cut by the Fed.
Meanwhile, the dollar was on the back foot on Friday ahead of the US nonfarm payrolls report. Its recent decline comes after the Fed held rates but maintained its stance on rate cuts. Investors had expected a more hawkish speech from Fed Chair Powell. However, he maintained that the next policy move would be a rate cut.
The next big report from the US is the NFP, which will shape the outlook for rate cuts. Economists expect a drop in employment from the previous month. However, if the figures beat estimates as they have recently, the EUR/USD pair could rally.
EUR/USD key events today
- US average hourly earnings
- US nonfarm employment change
- US unemployment rate
- US ISM services PMI
EUR/USD technical price analysis: Bulls challenging strong resistance
On the technical side, the EUR/USD price is challenging the 0.5 Fib retracement level, which sits near the 1.0750 key level. Moreover, the bias is bullish because the price recently broke above the 30-SMA after reversing at the 1.0650 key support level. At the same time, the RSI broke above 50 to trade in bullish territory.
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Consequently, the price might soon break above the 0.5 Fib and the 1.0750 key resistance level to make a new high. Moreover, the path will be clear for bulls to retest the 1.0850 key level.
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