During Friday’s North American session, the EUR/USD pair continued to rise and reached near 1.1380. This increase was due to the weakening of the US Dollar (USD), following US President Donald Trump’s request for the Federal Reserve (Fed) to lower interest rates. The US Dollar Index (DXY), which tracks the value of the US currency against six major currencies, fell below 99.50.
Trump expressed his satisfaction with the current state of the US economy in a post on Truth.Social shortly after the release of the US Nonfarm Payrolls (NFP) data for April. Although the NFP data showed an addition of 177,000 new workers to the US economy, which was higher than the expected 130,000, it was slightly lower than March’s count of 185,000 (revised down from 228,000). The Unemployment Rate remained unchanged at 4.2%, as predicted. Despite the positive job growth, uncertainty due to Trump’s tariffs could potentially discourage the Fed from lowering interest rates in the near future. As a result, traders have reduced their expectations of a rate cut in the Fed’s June meeting.
The CME FedWatch tool indicates that the chances of a rate cut in June have decreased from 58% to 41%. In the meantime, the central bank is expected to keep interest rates in the range of 4.25%-4.50% during their May meeting.
Although the Average Hourly Earnings data, which measures wage growth, showed a moderate monthly increase of 0.2% (lower than the expected 0.3%), it still grew by 3.8% year-on-year (slightly lower than the predicted 3.9%).
After bouncing back from its two-week low of 1.1265 on Thursday, the EUR/USD pair has crossed the key level of 1.1300 and is now aiming to reach 1.1400. The pair received support around the 20-day Exponential Moving Average (EMA) at 1.1260.
The Relative Strength Index (RSI), which measures the momentum of a currency, has fallen within the range of 40.00-60.00, suggesting that the current bullish momentum may have come to an end. However, upside potential still exists.
In terms of resistance, the psychological level of 1.1500 will be key for the EUR/USD pair, while the September 25th high of 1.1214 will act as a support for Euro bulls.
For those interested in trading the EUR/USD pair, we have selected some of the best brokers to consider. Understanding the strengths of each broker will help you find the best fit for your trading strategy.