The European Central Bank’s Yannis Stournaras suggested on Friday that there may only be three ECB rate cuts this year. This comes as Eurozone economic growth exceeded expectations in the first quarter. On the other hand, the dollar is set for its worst week in two months.
The EUR/USD price analysis indicates bullish momentum as the euro strengthens on slightly less dovish ECB policy comments. The dollar’s decline is notable, with all attention on the upcoming US employment report.
Stournaras’ remarks on possible rate cuts align with recent positive economic data suggesting high inflation levels. Despite the Eurozone’s strong Q1 growth, the ECB is expected to implement its first rate cut before the Federal Reserve in June. This could lead to a bearish outlook for the euro in the long term.
In contrast, the dollar’s recent weakness is attributed to the Fed’s decision to hold rates while hinting at potential cuts. Investors anticipated a more hawkish stance from Fed Chair Powell, but he reiterated the likelihood of a rate cut in the future.
The upcoming US nonfarm payrolls report will be crucial in determining the outlook for rate cuts. Economists anticipate a decrease in employment numbers, but positive figures could lead to a rally for the EUR/USD pair.
Key events for EUR/USD today include US average hourly earnings, nonfarm employment change, unemployment rate, and ISM services PMI. The technical analysis shows bulls challenging strong resistance levels, with potential for a breakout above key levels.