EUR/USD Slumps on Strong US NFPs & European Elections Jitters
EUR/USD Analysis
Friday's data reaffirmed the robust state of the US labor market, with 272,000 jobs added in May and an uptick in wages, despite higher unemployment. The report strengthens the case for the Fed's reserved approach towards removing monetary restraint and the greenback, as markets now price in just one rate cut this year (from tow previously).
The European Central Bank may have adopted a cautious approach towards lower rates, but still became the first major central bank to cut rates and pivot to a less restrictive stance [1]. The policy differential remains unfavorable for the pair, which is also weighed by political uncertainty. President Macron called snap elections after his party's heavy defeat in the European elections, which showed a broader rise of the far-right. [2]
EUR/USD takes a nosedive towards 1.0694, weighed by these negative forces, although the 2024 lows (1.0600) have a higher degree of difficulty. On the other hand, the ECB will move carefully form here on and the Fed is still expected to cut rates within the year. On the technical front, the Relative Strength Index (RSI) points to oversold conditions and along with the daily Ichimoku cloud could help EUR/USD reclaim the EMA200, but dos not inspire confidence for sustained recovery.
There multiple high-impact events this week that can spark volatility and determine the trajectory of the pair. The Fed's is unlikely to move on rates, but its intentions and the dot-plot will be closely watched. Earlier in the same day, we expect the crucial CPI inflation update.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 10 Jun 2024 https://www.ecb.europa.eu/press/pr/date/2024/html/ecb.mp240606~2148ecdb3c.en.html | |
| Retrieved 17 Apr 2026 https://x.com/EmmanuelMacron/status/1800035776408740316 |
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