EUR/USD Climbs Off Lows as Market Cheers Tariff Verdict, Fed Bets Ease

Economic

Summary:

EUR/USD edges higher as US court ruling on tariffs boosts the dollar, but Eurozone data lags; technical setup hints at bullish continuation.

BUY EURUSD

Close Time

CLOSED

1.13600

Entry Price

1.15500

1.12000

1.16387 -0.00039 -0.03%

58.5

Pips

Profit

1.12000

1.14185

Exit Price

1.13600

Entry Price

1.15500

The euro is cautiously retracing losses against the US dollar on Thursday, recovering from an earlier slide to 1.1213 as global markets digest a consequential US court ruling that may reshape trade policy dynamics. At the time of writing, EUR/USD is trading modestly lower near 1.1285, bouncing from multi-day lows after a dramatic surge in the dollar during the Asian session.

Driving the dollar’s advance was a landmark ruling by the US Court of International Trade, which dealt a legal blow to the Trump administration’s signature trade tariffs. In a unanimous decision, a three-judge panel invalidated the so-called “Liberation Day” tariffs, asserting that the constitutional power to regulate foreign commerce lies squarely with Congress—not the executive branch.

The verdict jolted global markets, sparking renewed risk appetite. The US dollar surged, sending the US Dollar Index (DXY) back above the psychologically significant 100.00 level, its highest in ten days, now trading roughly 1.8% above last week’s lows. The rally has reverberated across global equities, lifting Asian and European bourses, with Wall Street futures indicating a strong open as investor optimism builds on the notion that tariff tensions may ease.

However, the relief may prove temporary. The Biden administration has already filed an appeal, likely initiating a drawn-out legal process. Nevertheless, for now, the positive tone has tempered the broader “Sell America” narrative that had gripped markets in recent weeks amid expectations for Federal Reserve policy easing.

Indeed, the shift in sentiment has rippled into rate markets. Fed rate-cut bets are being dialed back, with futures now pricing in approximately 42 basis points of easing for the remainder of the year—down from the 50 bps anticipated just days earlier. Investors appear to be reassessing the Fed’s reaction function, especially after minutes from the central bank’s latest policy meeting highlighted concerns about stagflation—a scenario marked by both slowing growth and persistently high inflation.

While the dollar rally has been robust, the euro has not been entirely left behind. On the European front, Thursday brought a mix of macroeconomic signals. Better-than-expected Italian business and consumer confidence data helped cushion the euro’s fall, partially offsetting disappointing labor market numbers from France and Germany earlier in the week. Still, lingering economic fragility across the Eurozone remains a persistent headwind for any sustained euro recovery.

The fundamental calendar remains event-heavy. On Thursday, the second estimate of US Q1 GDP is due, with markets expecting confirmation of a 0.3% contraction—an abrupt slowdown from the 2.4% and 3.1% growth prints in the prior two quarters. Weekly jobless claims and appearances by multiple Fed officials will also provide further insight into the health of the labor market and policymakers' willingness to ease policy later this year. However, the week's marquee event remains Friday’s Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation gauge—which could significantly sway rate expectations and market direction.

Technical Analysis

From a technical standpoint, EUR/USD is beginning to show signs of a bullish continuation, following a rebound from key support and a break above an ascending triangle formation on the 4-hour chart. The pair has climbed above a major resistance zone near 1.1300, validated by a strong bullish candlestick pattern. It is now trading around 1.1371—marking an encouraging step for euro bulls.

The Relative Strength Index (RSI) is also trending higher, reflecting growing upward momentum and investor confidence in the breakout. This technical setup aligns with a classic ascending triangle structure—a bullish formation typically signaling the resumption of an uptrend.

The ideal entry zone for traders was around the breakout point between 1.1300 and 1.1320, where the euro breached prior resistance and began establishing new support. The next major target for this move lies near the 1.1550 area—previously tested highs that represent a logical point for profit-taking, based on the pattern’s projected height added to the breakout level.

Price action remains well-supported by a rising cloud base and an ascending channel structure, which adds further confluence to the bullish case. Should the pair maintain its position above the 1.1300 breakout zone, the path toward 1.1500 remains viable. Traders managing risk could consider placing a stop-loss below the recent swing low or the lower boundary of the cloud, around 1.1250–1.1270.

TRADE RECOMMENDATION

BUY EURUSD

ENTRY PRICE: 1.1360

STOP LOSS: 1.1200

TAKE PROFIT: 1.1550

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Eva Chen

Cryptocurrency

Summary:

In recent competition, Ethereum's price, with its broad upside potential, has become the primary beneficiary of institutional and investor rotation. Meanwhile, its staking yield may attract large investors.

BUY ETH-USDT

Close Time

CLOSED

2651.69

Entry Price

3600.00

2301.00

3133.05 +31.44 +1.01%

846.3

Pips

Profit

2301.00

2736.32

Exit Price

2651.69

Entry Price

3600.00

Fundamentals

Data from Coinglass shows that over the past 24 hours, Ethereum futures liquidation amounted to $52.12 million, with long liquidations at $34.6 million and short liquidations at $17.48 million.

On Thursday, Ethereum's price broke through the previous high of $2,740, and the ascending trendline and EMA support may help bulls maintain dominance. At the time of writing, Ethereum is quoted at $2,731, having oscillated within the narrow range of $2,443 to $2,788 over the past week.

On the macro level, the current technical landscape has been collectively shaped by the Fed's delayed rate cuts, Bitcoin's weak performance, and the Ethereum ecosystem's anticipation of EIP-4844.

In recent competition, Ethereum's price has shown an upward trend in a channel pattern, with broad upside potential, making it the primary beneficiary of institutional and investor rotation. Meanwhile, its staking yield may attract large investors.

In contrast, Bitcoin's market value has surpassed the $2 trillion mark, and its dominance over Ethereum is facing an upper limit as potential returns face a diminishing effect.

Ethereum May Outperform Bitcoin as Top Cryptocurrencies Face Diminishing Returns_1

Technical Analysis

On Monday, Ethereum's price staged a rebound from the $2,460 mark, surging nearly 8%. However, it hit a snag above $2,700 on Tuesday, further cementing the key resistance level at $2,730. As a result, Ethereum's price continued to consolidate near $2,600 on Wednesday until Thursday's breakout of the previous resistance level at $3,740.

Before a new uptrend, bulls must initiate substantial buying to offset the selling pressure near the key range of $2,740 to $2,850 and transform it into support to solidify the upward momentum.

In terms of momentum, the daily structure has closed above $2,500 for five consecutive days, indicating effective short-term support. The MACD momentum column has weakened, but there are signs of a potential golden cross between the fast and slow lines. The RSI is neutral to bullish (57), with room for further upside without entering overbought territory.

If bulls break through $2,800 on the daily line, the target could potentially look towards the $2,950 or even the $3,000 psychological level. A breakdown below $2,630 would lead to a retest of the $2,500 support in the short term.

Currently, Ethereum's price is stable near $2,600, showing significant resilience. The price movement is awaiting a more decisive directional choice, with on-chain data supporting a medium-term bullish view, and EIP-4844 forming a significant potential catalyst.

Trading Recommendations

Trading Direction: Long

Entry Price: 2600

Target Price: 3600

Stop Loss: 2301

Deadline: June 13, 2025, 23:55:00

Support: 2612/2490/2324

Resistance: 2787/2867/2923

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The British Pound rebounds to 1.3470 against the US Dollar as markets digest a US court ruling that dismantles Trump-era tariffs.

BUY GBPUSD

Close Time

CLOSED

1.34845

Entry Price

1.36500

1.33710

1.33264 -0.00048 -0.04%

64.3

Pips

Profit

1.33710

1.35488

Exit Price

1.34845

Entry Price

1.36500

The Pound Sterling staged a notable recovery against the US Dollar on Thursday, climbing back to 1.3470 in afternoon European trade, after dipping to an intraday low of 1.3415. This rebound reflects a broader shift in market sentiment triggered by a landmark US court ruling that deemed Donald Trump’s sweeping tariff agenda unconstitutional. The ruling, which disrupts what many businesses had already baked into their procurement strategies, created fresh turbulence for the US Dollar and injected new volatility into global markets.

The United States Court of International Trade found that Trump’s imposition of tariffs under the International Emergency Economic Powers Act (IEEPA) constituted an overreach of presidential authority. Specifically, the court ruled that the former president’s usage of the decades-old law, originally designed for national security emergencies, was an improper justification for introducing what were essentially economic protectionist measures. While targeted tariffs on automobiles, metals, and semiconductors remain temporarily valid, the broader import levies announced during what was dubbed “Liberation Day” have been annulled. The court has given the administration a ten-day window to issue a permanent injunction, a deadline the White House swiftly appealed.

This legal bombshell led to initial gains for the US Dollar, US equities, and Treasury yields, as investors saw the ruling as a potential signal of reduced global trade friction. However, the Greenback's momentum quickly faded. The US Dollar Index (DXY), which tracks the dollar against a basket of six major currencies, rose to 100.50 early in the session but later slipped back toward 100.10 as traders reassessed the implications of the court’s decision on longer-term economic policy and legal uncertainty.

Sterling, meanwhile, found renewed strength not just from the weakening dollar but from improved sentiment surrounding the UK’s domestic outlook. The International Monetary Fund (IMF) revised its growth forecast for the UK economy, upgrading the 2025 GDP projection from 1.1% to 1.2%. This followed a stronger-than-expected first quarter, during which the Office for National Statistics (ONS) reported economic expansion of 0.7% — a significant acceleration from the 0.1% growth recorded in the last quarter of 2024, and ahead of consensus expectations.

In addition to stronger growth numbers, markets are paring back expectations that the Bank of England (BoE) will implement further interest rate cuts in the near term. A spate of hotter-than-anticipated economic data, including April’s Consumer Price Index (CPI) and retail sales figures, has led traders to dial down dovish bets on the BoE’s June meeting. The inflation report showed that price pressures in the UK are proving more persistent than previously thought, while the strength of consumer spending suggests continued underlying momentum in the economy.

With Sterling bolstered by both global and domestic tailwinds, traders are now closely eyeing Friday’s release of the US Personal Consumption Expenditures (PCE) Price Index — the Federal Reserve’s preferred measure of inflation. The core PCE figure is forecast to rise by 2.5% year-on-year in April, a slight cooling from the previous month’s 2.6%. Should the data come in softer than expected, it would reinforce the case for a more dovish Fed, further weighing on the US Dollar and potentially lifting GBP/USD further.

Technical Analysis

Technically, the GBP/USD currency pair remains in a bullish formation, underpinned by a series of higher lows and a breakout above the 200-day moving average — a widely watched barometer for trend confirmation. The pair has also broken above a key descending trendline, signaling a structural shift in market direction from bearish to bullish. The 1.3400 level has emerged as a critical support zone, aligning with a recent consolidation area. If the pair holds above this level and continues to consolidate above 1.3480, the setup favors further upside.

Immediate resistance is found near the 1.3515 region, which coincides with a recent swing high. A move beyond that could open the door to 1.3580 and eventually 1.3650, the upper bound of the prevailing bullish channel. The overall market structure suggests the pair is not in reversal but in a consolidation phase within an established uptrend, which increases the likelihood of a sustained breakout higher if fundamental and technical conditions remain supportive.

TRADE RECOMMENDATION

BUY GBPUSD

ENTRY PRICE: 1.3485

STOP LOSS: 1.3371

TAKE PROFIT: 1.3650

Risk Warnings and Disclaimers

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Alan

Cryptocurrency

Summary:

Bitcoin remained range-bound between US$107,000 and US$110,000 today. Amid ongoing consolidation, accumulation of buy orders on dips persisted, indicating that once bullish momentum builds sufficiently, a breakout is likely.

BUY BTC-USDT

Close Time

CLOSED

108374.0

Entry Price

118000.0

103000.0

90446.0 +484.0 +0.54%

5374.0

Pips

Loss

103000.0

102980.6

Exit Price

108374.0

Entry Price

118000.0

Fundamentals

Bitcoin remained range-bound between US$107,000 and US$110,000 today, influenced by a combination of macroeconomic liquidity conditions and market sentiment.

Firstly, recent softening in U.S. macroeconomic data has prompted the Federal Reserve to adopt a more cautious policy stance, with short-term rate cut expectations persisting but unlikely to materialize immediately. Against this backdrop, capital allocation toward crypto assets has seen a modest rebound, particularly favoring Bitcoin due to its prominent "digital gold" characteristics.

Secondly, regulatory developments have been favorable: several major exchanges have advanced their Bitcoin ETF applications with U.S. regulators, lowering institutional entry barriers and fostering a more optimistic outlook for sustained asset accumulation.

Moreover, on-chain metrics from Glassnode indicate a slight increase in holdings by wallets with over 10,000 BTC in the past week, suggesting that some institutions or large investors are accumulating incrementally during the market correction. Concurrently, positive net outflows from exchanges signal easing selling pressure.

Overall, Bitcoin currently operates within a favorable environment characterized by policy uncertainty coupled with growing institutional participation, supporting its consolidation at elevated levels as it builds momentum for a potential breakout.

Technical Analysis

Bottom-Fishing Signal? Bitcoin Consolidates, Presenting Dip-Buying Opportunity Targeting the $120,000 Threshold_1

In the 1D timeframe, Bitcoin began a correction after reaching a peak of US$112,000 on May 22, retracing to stabilize around the US$107,000 level before rebounding. Currently, the price hovers near US$107,800, positioned slightly between the 10-day and 20-day SMAs, indicating a short-term equilibrium between bullish and bearish forces, while the medium- to long-term SMAs continue to signal an upward trend.

In the 4H timeframe, Bitcoin exhibits a narrow-range consolidation pattern, forming a "rectangle" with resistance near US$110,000 and support around US$107,000. Trading volume notably declined during the pullback and modestly increased during the rebound, suggesting insufficient bearish momentum to drive a deeper correction. If the price approaches the lower boundary with increased volume and rebound, bulls may regain control. A decisive breakout and close above US$110,000 would likely open a new upward channel, with short-term targets in the US$115,000 to US$120,000 range.

Trading Recommendations

Trade Direction: Buy

Entry Price: 106,000

Target Price: 118,000

Stop Loss: 103,000

Valid Until: June 12, 2025 23:00:00

Support: 105,810, 100,000

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

Gold slips below $3,300 after Fed minutes highlight persistent inflation risks and rising yields. Stronger U.S. data and rebounding Treasury yields stall bullion’s rally, despite ongoing geopolitical support.

SELL XAUUSD

Close Time

CLOSED

3285.00

Entry Price

3150.00

3370.00

4189.21 -8.70 -0.21%

850.0

Pips

Loss

3150.00

3370.43

Exit Price

3285.00

Entry Price

3370.00

Gold prices declined on Wednesday, pulling back from early session highs as investors reassessed their inflation expectations and re-priced U.S. monetary policy trajectory in response to the latest Federal Reserve meeting minutes. Amid renewed strength in the U.S. Dollar and Treasury yields, bullion's safe-haven bid faded temporarily, despite a still-volatile geopolitical backdrop.

Spot gold (XAU/USD) traded around $3,297 per ounce during late North American hours, falling 0.27% intraday after peaking near $3,325. This marks the second consecutive session of weakness for the yellow metal, following weeks of gains that saw it pushing record territory above $3,300. The pullback coincides with a broader risk recalibration after the Federal Reserve released its May 6–7 meeting minutes, which revealed rising internal concerns over stagflation-like risks—persistent inflation coupled with weakening labor market conditions.

The minutes outlined a cautious tone from the central bank, with members signaling hesitancy in either tightening or loosening monetary policy until the economic impact of shifting U.S. tariff policies becomes clearer. While the Fed held its benchmark rate steady at 5.25–5.50%, it acknowledged a potential policy dilemma should inflation remain sticky amid signs of cooling growth and labor markets. This sentiment comes ahead of critical economic data this week, including the second estimate for Q1 GDP and the Fed’s favored inflation barometer—the Core PCE Price Index.

Notably, the minutes were recorded before President Donald Trump announced a significant rollback of tariffs on Chinese goods, reducing some duties from 145% to 30%. Although this shift in trade posture may eventually support growth, its disinflationary or inflationary effects remain uncertain. Nevertheless, optimism about U.S.-China and U.S.-India trade developments helped stabilize equity markets while limiting gold’s upside.

Supporting the Greenback was a rebound in Treasury yields, which saw the U.S. 10-year note rise 4.5 basis points to 4.493%, while real yields on inflation-protected securities climbed to 2.171%. This move undercut gold’s appeal, as higher yields increase the opportunity cost of holding non-yielding assets like bullion. Concurrently, the U.S. Dollar Index (DXY) jumped 0.33% to 99.89, buoyed by strong consumer confidence data. According to the Conference Board, U.S. consumer sentiment improved by the most in four years, providing another tailwind for the Greenback.

Meanwhile, New York Fed President John Williams emphasized the central bank's commitment to anchoring inflation expectations, warning against allowing inflation to become entrenched. His remarks added weight to the perception that rate cuts remain off the table in the near term.

Despite this week’s price weakness, fundamental demand for gold remains robust. According to customs data, gold imports into Switzerland from the U.S. hit their highest level since at least 2012 in April, suggesting steady institutional interest. Additionally, net gold inflows into China via Hong Kong more than doubled in April compared to March, marking their highest level since early 2024.

Goldman Sachs analysts reaffirmed their bullish stance, urging investors to raise gold allocations in long-term portfolios. The firm pointed to rising geopolitical tensions, elevated central bank demand, and growing skepticism over U.S. institutional credibility. “In this uncertain macro landscape, gold offers valuable diversification and tail-risk protection,” they stated in a note cited by Reuters.

Ongoing geopolitical concerns continue to offer a backstop to gold prices. The Israel-Hamas conflict remains unresolved, while tensions persist between Russia and Ukraine. These unresolved crises could prompt flight-to-safety flows back into precious metals should market stress resurface.

Technical Analysis

Gold's recent price action shows signs of technical weakness, with a bearish head-and-shoulders pattern becoming increasingly clear. The resistance trendline has been repeatedly respected, and the price recently broke a short-term ascending trendline, accelerating selling pressure. This coincides with a bearish RSI divergence, which suggests fading bullish momentum.

The failure to hold above the 50-period Exponential Moving Average (EMA50) underscores growing downside risk. As long as prices remain below the $3,280 threshold, technical indicators point to a possible test of the $3,160 support zone in the near term. Immediate resistance remains capped at $3,300.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 3285

STOP LOSS: 3370

TAKE PROFIT: 3150

Risk Warnings and Disclaimers

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Manuel

Forex

Central Bank

Summary:

If the trendline breaks, it could intensify the selling pressure, with the next support level at 1.7387

SELL EURAUD

Close Time

CLOSED

1.75122

Entry Price

1.73900

1.76310

1.75712 +0.00445 +0.25%

118.8

Pips

Loss

1.73900

1.76310

Exit Price

1.75122

Entry Price

1.76310

Earlier today, Germany’s unemployment data was released, showing the unemployment rate holding steady at 6.3%. However, the number of jobless claims rose by 34,000, well above the expected increase of 11,000. These figures follow a weak GfK Consumer Confidence Survey and further confirm that the Eurozone's largest economy remains on shaky ground.

In France, consumer spending rose by 0.3% in April, marking a rebound from March’s 1.1% decline. While this was an improvement, it still fell short of the market’s expectation of a 0.8% gain. The first-quarter GDP confirmed a growth of 0.1%, in line with previous estimates, while Non-Farm Payrolls decreased against expectations.

ECB policymaker François Villeroy de Galhau commented that the 0.6% inflation rate in France was a “very encouraging sign of disinflation at work.” His dovish remarks on monetary policy suggested that the ECB’s normalization process might be far from complete, pointing to the possibility of further adjustments in the coming months.

In contrast, one of the more hawkish members of the ECB, Robert Holzmann, argued that the central bank should pause interest rate cuts at least until September, especially in light of the ongoing EU-U.S. trade tensions. Holzmann emphasized that he saw no reason for further rate reductions during the ECB's meetings in June and July.

Meanwhile, Australia’s April Consumer Price Index (CPI) data, released by the Australian Bureau of Statistics on Wednesday, showed a stable reading of 2.4% year-on-year, matching March’s figure and surpassing the forecast of 2.3%. These numbers remain within the Reserve Bank of Australia’s (RBA) target range of 2-3%. Markets continue to price in a possible rate cut at the RBA’s July meeting, following the recent reduction of Australia’s Cash Rate to 3.85% during the May 20 meeting.

The RBA is expected to take a less dovish stance in the coming months, with some analysts predicting the central bank will return to a more neutral monetary policy position. However, the National Australia Bank (NAB) has raised its terminal rate forecast to 3.1%, up from the previous 2.6%. Trendline Break Could Unleash a Deeper Correction in EURAUD_1

Trendline Break Could Unleash a Deeper Correction in EURAUD_1

Technical Analysis

EURAUD is encountering significant resistance near the 1.7631 level, a price zone that has triggered downward pressure on three separate occasions. On this occasion, the correction could extend, as EURAUD has just closed below the 100-period moving average. If the trendline breaks, it could intensify the selling pressure, with the next support level at 1.7387. A break below the 200-period moving average would signal a deeper pullback.

The RSI stands at 36, approaching oversold territory. However, extreme RSI readings are often observed in pairs like GBPAUD, particularly on shorter timeframes such as the 2-hour chart. If the trendline provides significant support, the pair could reverse its momentum and move higher. Conversely, if EURAUD breaks the last resistance at 1.7631, the bearish setup would be invalidated.

Trading Recommendations

Trading direction: Sell

Entry price: 1.7517

Target price: 1.7390

Stop loss: 1.7631

Validity: Jun 06, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

The failure to print a higher high suggests that the pair may be poised for a deeper retracement, especially given the overextended rally that has brought it to its highest levels since 2022.

SELL EURUSD

Close Time

CLOSED

1.12909

Entry Price

1.09370

1.15800

1.16387 -0.00039 -0.03%

44.1

Pips

Profit

1.09370

1.12468

Exit Price

1.12909

Entry Price

1.15800

The Federal Reserve’s meeting minutes released Wednesday revealed ongoing internal deliberations over the potential economic impact of the Trump administration’s still-evolving trade policies. While the most aggressive tariffs remain suspended for now, they have not been fully withdrawn, maintaining a layer of uncertainty. Policymakers and Fed staff noted that recent bond market volatility warranted close attention, highlighting it as a possible threat to financial stability. Moreover, they pointed out that a shift in the U.S. dollar’s traditional safe-haven role, coupled with rising Treasury yields, could have far-reaching consequences for the broader economy.

Fed officials also raised concerns about a scenario in which inflation and unemployment might rise simultaneously—a combination that could force the central bank into a difficult position: whether to tighten monetary policy to rein in inflation or ease rates to support growth and employment.

Amid this backdrop, U.S. consumer confidence posted a remarkable rebound in May, recovering from near five-year lows. The Conference Board’s confidence index surged by 12.3 points to 98.0, marking the strongest monthly increase in four years and surpassing the consensus forecast of 87.1 from a Bloomberg survey of economists. The data reflected improving sentiment toward both the economy and the labor market as trade tensions appeared to subside, at least temporarily.

Expectations for the next six months saw their most significant monthly rise since 2011, while the assessment of current conditions also improved. The recovery in confidence was broad-based across age groups, income levels, and political affiliations, though the sharpest increase was seen among Republican respondents.

However, not all economic data was upbeat. New orders for U.S. durable goods fell sharply in April, dropping 6.3%, or $19.9 billion, to $296.3 billion, following a downwardly revised gain of 7.6% in March. The latest decline, though significant, was slightly less severe than the expected 7.9% fall. According to the U.S. Census Bureau, excluding transportation, new orders rose by a modest 0.2%. But when defense-related orders were removed, the data showed a deeper 7.5% decline.

The transportation equipment category, which had posted four consecutive months of gains, led the April drop with a decline of $20.3 billion, or 17.1%, bringing the total to $98.8 billion. This reversal highlights the fragility of recent gains and reinforces the mixed nature of current economic momentum.

In Europe, early estimates of France’s Consumer Price Index (Harmonized with EU standards) for May pointed to a noticeable cooling in inflation. The annualized CPI rose at a slower pace of just 0.6%, down from April’s 0.9% increase. This weaker inflation print has prompted renewed support within the European Central Bank (ECB) for a rate cut at the upcoming June policy meeting.

ECB policymaker and French central bank governor François Villeroy de Galhau called the 0.6% inflation rate a “very encouraging sign of disinflation at work” during remarks on Tuesday. Villeroy struck a dovish tone on the path of monetary policy, suggesting that policy normalization in the eurozone may still have some way to go. Key Resistance Level Could Set the Stage for a Pullback_1

Key Resistance Level Could Set the Stage for a Pullback_1

Technical Analysis

The EUR/USD pair is currently facing a strong resistance level near 1.1426—a price zone that has triggered downward pressure on three separate occasions. Each time the pair approached this level, it was met with selling interest, reinforcing the significance of this area. Notably, the local high at 1.1575, set on April 21, remains untouched. The failure to print a higher high suggests that the pair may be poised for a deeper retracement, especially given the overextended rally that has brought it to its highest levels since 2022.

The Relative Strength Index (RSI) has reached 60, still below the overbought threshold. However, the recent rejection from resistance, combined with the lack of fresh highs, could intensify downside pressure in the short term. If the pair continues to struggle near current levels, a correction could unfold, targeting the next significant support around 1.0937. This area, which previously acted as a major resistance, may now serve as a potential demand zone—making it a crucial level for traders looking to position for the next major move.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1291

Target price: 1.0937

Stop loss: 1.1580

Validity: Jun 06, 2025 15:00:00

Risk Warnings and Disclaimers

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