empty
17.04.2025 11:55 AM
EUR/USD: Analysis and Forecast

This image is no longer relevant

regarding upcoming changes in monetary policy from both the European Central Bank (ECB) and the U.S. Federal Reserve (Fed).

Anticipation of a 25 basis point rate cut by the ECB—its sixth consecutive cut amid easing inflation and ongoing trade risks—may significantly impact the euro's exchange rate and overall market sentiment. According to Eurostat data released on Wednesday, annual inflation in the eurozone fell to 2.2% in March from 2.6% the previous month. Core inflation, which excludes energy and food prices, dropped to 2.4%, a level last seen in January 2022.

The decline in inflation and the overall slowdown in the eurozone economy—exacerbated by high tariffs from the U.S.—provide a basis for a more dovish stance from the ECB. Investors and traders should closely monitor today's European economic releases and ECB President Christine Lagarde's comments, which may offer guidance on the central bank's next steps. It will be especially important to understand how the ECB plans to address current economic challenges and what forecasts it is ready to present.

On the other hand, the situation in the U.S. appears somewhat different. A 1.4% rise in retail sales in March points to continued strength in consumer spending, which may reduce pressure on the Fed to cut interest rates. Jerome Powell's recent comments that the Fed is not inclined to ease policy in the near future further reinforce confidence in the U.S. economy—especially considering that inflationary pressures have stemmed primarily from President Donald Trump's aggressive tariff policies. Nevertheless, markets are still pricing in the possibility that the Fed may lower borrowing costs three times this year due to growing concerns about an economic slowdown driven by trade tensions.

Today's U.S. economic releases, including initial jobless claims and construction sector data, could provide insight for adjusting trading positions. These figures will influence market expectations for future actions by the Fed and ECB—setting the tone not only for the currency market but also for short-term trading strategies.

Thus, upcoming events and economic reports may have a significant impact on the EUR/USD exchange rate and help shape expectations for future monetary policy in both regions.

From a technical standpoint, since oscillators on the daily chart remain in overbought territory, the EUR/USD pair is currently susceptible to a correction.

Irina Yanina,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

Gold Rebounds as Fiscal Risks Resurface

Gold is swinging between extremes as spring draws to a close. The week ending May 16 was the worst for the precious metal due to optimism that, following a trade

Marek Petkovich 17:31 2025-05-23 UTC+2

AUD/JPY. Analysis and Forecast

Today, the AUD/JPY pair has started to attract buying interest, halting its pullback from the monthly high as demand for the Australian dollar emerges. Today's talks between U.S. Deputy Secretary

Irina Yanina 17:25 2025-05-23 UTC+2

USD/CAD. Analysis and Forecast

The pair is trending lower, dropping close to the key psychological level of 1.3800 amid broad-based U.S. dollar weakness. Traders have raised their expectations for Federal Reserve rate cuts following

Irina Yanina 16:43 2025-05-23 UTC+2

USD declares war on EUR

What's new is often just what's been forgotten. As spring draws to a close, the long-dismissed mantra "sell America" is making a comeback in markets. The phrase gained traction following

Marek Petkovich 14:59 2025-05-23 UTC+2

USD/JPY: what happens with yen?

The USD/JPY pair is experiencing heightened price turbulence. At the end of April, the pair sharply declined, hitting a 7-month low at 139.90. Then, last week, a northbound impulse pushed

Irina Manzenko 13:52 2025-05-23 UTC+2

Market Chaos to Continue (There is a likelihood of continued local declines in #USDX and gold prices)

Markets continue to act blindly amid the chaotic actions of Donald Trump, who is trying to pull the U.S. out of a deep, all-encompassing crisis like Baron Munchausen pulling himself

Pati Gani 10:19 2025-05-23 UTC+2

The Market Tucks Its Tail

A necessary project at the wrong time. The House of Representatives has approved Donald Trump's tax cut initiative. The President hopes it will help stimulate the economy and offset shortcomings

Marek Petkovich 09:29 2025-05-23 UTC+2

GBP/USD Overview – May 23: No Talks, but Hang in There

On Thursday, the GBP/USD currency pair traded relatively calmly, but like EUR/USD, it has been rising for two weeks. At first glance, one might wonder what reasons traders have

Paolo Greco 08:15 2025-05-23 UTC+2

EUR/USD Overview – May 23: The Rebellion Against the Dollar Continues

The EUR/USD currency pair traded relatively calmly on Thursday, yet it has risen significantly over the past two weeks. This movement can be interpreted in several ways. From a technical

Paolo Greco 08:15 2025-05-23 UTC+2

What to Pay Attention to on May 23? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Friday. Only two are noteworthy: the final estimate of Germany's Q1 GDP and April's UK retail sales data. The German GDP report

Paolo Greco 05:58 2025-05-23 UTC+2
Can't speak right now?
Ask your question in the chat.
 

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 InstaTrade anyway.

We are sorry for any inconvenience caused by this message.