empty
20.05.2025 07:16 PM
Euro Exhausts Bullish Momentum

Inflation in the eurozone remained unchanged in April compared to March, fully in line with forecasts—2.2% year-over-year for the headline index, and 2.7% year-over-year for the core index. This inflation stability generally benefits the ECB, which, through comments from Governing Council members, confirmed its gradual shift toward a more dovish stance.

The European Commission released an update to its economic forecasts. Specifically, real GDP growth in 2025 is now expected at 0.9%, down from the November estimate of 1.3%. The downgrade is attributed to increased uncertainty around tariffs. Inflation is projected at 2.1% year-over-year in 2025 and 1.7% in 2026, with the latter revised down from 1.9% to 1.7%, aligning with the ECB's forecasts. This adjustment suggests that the ECB may also lower its forecast in June, signaling a dovish turn.

Overall sentiment is deteriorating. While PMI indices remain relatively stable, they are not improving, and consumer confidence continues to decline.

This image is no longer relevant

The ECB adopted a clearly more dovish stance at its April meeting, and since then, officials' comments have mostly echoed this tone. Against this backdrop, another rate cut in June seems highly likely, and further cuts could follow if uncertainty persists and economic momentum weakens further. For now, markets are pricing in a terminal rate of around 2%, implying one more cut in June—but only if the economic situation does not worsen.

There is also some positive news—the EU and the U.S. have finally begun trade negotiations. While there are no concrete outcomes yet, the fact that talks have started eases tensions. It's unclear who will ultimately benefit—the euro or the dollar. The EU initially holds a weaker position, as it is forced to play defense, and the intrigue likely lies in how much the EU will concede. This will influence the euro's prospects.

Net long positions in the euro increased by €1.1 billion during the reporting week, reaching €11.8 billion. Speculative positioning remains firmly bullish, but the fair value estimate is trending downward.

This image is no longer relevant

The EUR/USD pair, as expected, spent the week within a trading range, bouncing slightly from the 1.1066 low. There are fewer reasons for growth now; we expect continued range-bound trading with a bias toward a move down to 1.1066. The resistance zone at 1.1260/80 will likely form a local peak, followed by a decline. A move above 1.1260/80 is considered unlikely.

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

AUD/JPY. Analysis and Forecast

The AUD/JPY pair is regaining positive momentum after a modest pullback the previous day. However, spot prices remain confined within a multi-day range due to mixed fundamental signals, trading near

Irina Yanina 14:39 2025-06-20 UTC+2

USD/CHF: The Pair Struggles to Gain Momentum Amid Conflicting Forces

At present, USD/CHF shows no clear intraday direction and fluctuates within a narrow range just above the 0.8155 level, reflecting market uncertainty during the European session. The Swiss franc

Irina Yanina 14:36 2025-06-20 UTC+2

The Euro Will Retain Its Strength and Investor Interest

During her speech, IMF Managing Director Kristalina Georgieva stated that she sees the potential for the euro to play a broader role globally.Her remarks came amid growing geopolitical instability

Jakub Novak 11:25 2025-06-20 UTC+2

Euro Slightly Rises After Lagarde's Speech

The euro saw a modest recovery after European Central Bank President Christine Lagarde stated that expanding trade within the region could help offset losses resulting from global fragmentation. Her optimistic

Jakub Novak 11:10 2025-06-20 UTC+2

Donald Trump – A Mastermind of Geopolitical Uncertainty (A Potential Correction in Oil and Gold Prices)

Six months into Donald Trump's presidency, it seems he has already thoroughly exhausted the world with his "brilliant" initiatives, groundbreaking actions aimed at making America great again, and his vivid

Pati Gani 09:49 2025-06-20 UTC+2

The Market Tries to Extinguish the Fire

Markets are digesting Donald Trump's announcement that a decision on U.S. strikes against Iran will be made within two weeks. The White House could have acted at any moment

Marek Petkovich 09:01 2025-06-20 UTC+2

What to Pay Attention to on June 20? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic reports scheduled for Friday. The only report of the day will be the UK retail sales report. No economic data will be released today

Paolo Greco 07:45 2025-06-20 UTC+2

GBP/USD Overview – June 20: The Bank of England Didn't Surprise

The GBP/USD currency pair traded relatively calmly on Thursday, given the fundamental backdrop available to the market. On Wednesday evening, the Federal Reserve announced the results of its latest meeting

Paolo Greco 07:16 2025-06-20 UTC+2

EUR/USD Overview – June 20: Summing Up the Fed Meeting

The EUR/USD currency pair traded relatively calmly on Wednesday and Thursday. Recall that the results of the latest 2025 Federal Reserve meeting were announced on Wednesday evening, but we didn't

Paolo Greco 07:16 2025-06-20 UTC+2

USD/JPY. Analysis and Forecast

The Japanese yen is showing weakness against the stronger U.S. dollar, with the USD/JPY pair reaching a new monthly high. This rise in the dollar against the yen is mainly

Irina Yanina 20:12 2025-06-19 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.