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EURUSD:
EUR/USD remains stable in a narrow range between the levels of 1.1000 and 1.0900, despite the general recovery of investor interest in risk assets. This trend is observed against the backdrop of the United States’ recent refusal to immediately implement its tariff policy. US President Donald Trump announced via social media the administration’s decision to postpone the introduction of “retaliatory” tariffs for 90 days. Nevertheless, the current 10 percent duties remain in force for the time being.
Markets promptly reacted to this news by increasing demand, but the short-term strengthening of the euro to the level of 1.1100 was short-lived. The currency pair quickly returned to the previous price frames, remaining within the formed range.
The dynamics of interest rate expectations also changed. Market participants working with interest rate swaps have revised their forecasts and now expect the Federal Reserve to cut the key rate by 75 basis points by the end of this year. Although the baseline scenario suggests a 25 basis points rate cut as early as June, JPMorgan analysts believe it is more likely that the Fed will maintain a wait-and-see attitude. This approach is due to the continuing uncertainty in the U.S. trade policy and, as expected, may last at least until September.
Market participants are also focused on upcoming macroeconomic publications. On Thursday, the Consumer Price Index (CPI) data is expected to be released, and on Friday – the Producer Price Index (PPI), as well as the results of the University of Michigan (UoM) Consumer Sentiment Index. These reports will be the last important set of macroeconomic indicators covering the “pre-tariff” period of 2025 and will play a key role in shaping further expectations for the rest of the year.
Trading recommendation: BUY 1.0980, SL 1.0910, TP 1.1110
Origin: FreshForex
