empty
InstaForex - Official partner of Dragon Racing
InstaForex - Official partner of Dragon Racing
This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.
Start as Beginner
How to start trading
Useful information
Training and recordings
InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.
Become Investor
PAMM System
ForexCopy System
Passive investments
Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.
Become Partner
Main Page
Partner Area
Advantages for Affiliates
Registration
This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.
All Promo Campaigns
Bonuses
Contests
Events
Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.
Full details
Forums
We are in social networks
Forex humour
Forex Portal
InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.
Learn More
History
Why Choose Us
InstaSport
Regulation
Company News
Awards
InstaForex Stars
InstaForex Offline
Headquarters
Key documents
Social Responsibility
28.05.2024 12:23 AM
Investors bet on the euro's strength. Overview of EUR/USD
Open trading account Open demo account

The European Central Bank will hold its monetary policy meeting on Thursday, June 6. Traders are highly confident that the ECB will lower its benchmark deposit rate by 25 basis points, mainly because members of the Governing Council have repeatedly indicated this step.

The main source of optimism that drives the euro higher is that, by several indicators, the manufacturing sector in the Eurozone has started to steadily recover. The balance of orders and inventories reached a 2-year high in May. Labor market tensions are increasing, with employment rising by 0.3% in the first quarter, indicating that the economy continues to create new jobs.

The Eurozone inflation outlook is mixed. The services sector contributed approximately 3.7% year-on-year, and the downward trend is weak, while non-energy industrial goods are growing by only 0.9% y/y. Domestic inflation, meaning non-exportable inflation, is still too high at 4.3%. Its decline appears to be stable, but the pace is slow.

This image is no longer relevant

During the March and April ECB meetings, ECB President Christine Lagarde emphasized that by June they would know "much more." Since then the key indicators have shown that activity has unexpectedly increased in April, which continued into May, and a smaller-than-expected decline in inflation. There is a risk that inflation will decrease more slowly than forecasts suggest, meaning the ECB may not cut rates as aggressively as the markets currently expect. If these concerns materialize, the trajectory of rate cuts will become less steep, generally supporting the euro due to the retention of higher yields.

For instance, wage growth was 4.7% in the first quarter, 0.2% higher than the previous quarter. Although the ECB has highlighted that this growth is largely due to base effects, and faster indicators point to a decrease in wages, the risk of the ECB refraining from rate cuts cannot be ignored. Perhaps this is what the markets are considering when they buy the euro.

The market has already fully priced in the potential rate cut, so the results of the ECB meeting are unlikely to trigger a euro sell-off. Markets assume that the Eurozone's economic recovery pace exceeds forecasts, so the risks are generally towards a slower rate cut trajectory rather than a faster one, making surprises more likely to work in favor of the euro's strength.

The net long EUR position surged by $3.3 billion week to $5.6 billion over the reporting, shifting from neutral to a bullish position. The price is above the long-term average and continues to rise.

This image is no longer relevant

The EUR/USD pair slightly corrected after a strong rise on May 14-15, finding support in the 1.0800/20 zone. We expect the uptrend to resume with 1.0970/80 as the target. The likelihood of a deeper pullback to 1.0700/20 is low, as the bullish momentum is gaining strength.

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
All Analytics
Fundamental analysis
The Fed Chair Is Steadfast as Steel Everyone has already had time to review the results of the recent Federal Reserve meeting. In this article, I want to highlight a few positive points for the U.S. dollar
Chin Zhao
01:16 2025-05-09 +02:00
1030
Crypto-currencies
Bitcoin: Who's Driving the Price Up — Powell, the U.S. Treasury, or Short Squeezes? While stock indices remain stagnant, gold consolidates near its highs, and Bitcoin is once again capturing attention. The crypto market's flagship has approached the psychologically important $100,000 level
Ekaterina Kiseleva
00:28 2025-05-09 +02:00
1060
Breaking Forecast Trading Plan Cryptocurrencies USD/RUB Russian Economy Video Analysis
Trading Instruments
EURUSD GBPUSD USDCHF USDCAD USDJPY AUDUSD EURGBP EURJPY NZDUSD EURNZD Silver Gold #CL #USDX COVID-19 Bitcoin
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The Fed Chair Is Steadfast as Steel

Everyone has already had time to review the results of the recent Federal Reserve meeting. In this article, I want to highlight a few positive points for the U.S. dollar
Chin Zhao 01:16 2025-05-09 UTC+2

GBP/USD: Bank of England Cuts Rates, Trump Signs Trade Deal with London

On Thursday, the Bank of England delivered a widely expected 25 basis point interest rate cut, and Donald Trump announced the conclusion of a trade agreement with the United Kingdom
Irina Manzenko 00:28 2025-05-09 UTC+2

The Dollar Shot Itself in the Foot

As the first week of May comes to a close, a true spring has arrived on the financial markets. Global risk appetite is surging amid the imminent launch of U.S.-China
Marek Petkovich 00:28 2025-05-09 UTC+2

EUR/USD. Analysis and Forecast

On Thursday, the EUR/USD pair is falling below the psychological level of 1.1300. The election of Friedrich Merz as Chancellor of Germany reduces uncertainty regarding the economic strength
Irina Yanina 11:12 2025-05-08 UTC+2

The Market Will Save Itself

The Fed is no longer the center of the financial universe, and the S&P 500's 13% rally from April lows has once again made U.S. equities expensive. That sums
Marek Petkovich 10:13 2025-05-08 UTC+2

Fed's Rate Hold and US-China Talks Support the Dollar (High Likelihood of EUR/USD and Gold Declines)

The Federal Reserve remained firm, with its leadership reaffirming a steadfast wait-and-see approach. Interestingly, the Fed did not respond to notable changes in the economy, citing heightened uncertainty
Pati Gani 09:53 2025-05-08 UTC+2

The Bank of England Is Ready to Cut Rates

The Bank of England is expected to cut interest rates by a quarter of a percentage point today and signal that another reduction is likely in June. This could potentially
Jakub Novak 09:21 2025-05-08 UTC+2

Why Gold Dropped Sharply After the Fed Meeting

Gold experienced a slight uptick following the Federal Reserve's meeting, where interest rates were kept unchanged and Fed Chair Jerome Powell stated that the central bank is in no rush
Jakub Novak 09:17 2025-05-08 UTC+2

FOMC Meeting Results

The euro and British pound resumed their decline against the US dollar following the release of the Federal Reserve meeting results; however, the drop was not significant, and the future
Jakub Novak 09:15 2025-05-08 UTC+2

What to Pay Attention to on May 8? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic events are scheduled for Thursday, and none are significant. Germany will release its industrial production report for March, and the U.S. will publish weekly jobless claims. These
Paolo Greco 06:05 2025-05-08 UTC+2

Top analytics

Relevance up to 02:00 UTC--4
Why Gold Dropped Sharply After the Fed Meeting
09:17 2025-05-08
Fundamental analysis
Relevance up to 22:00 UTC--4
EUR/USD Forecast for May 8, 2025
05:09 2025-05-08
Technical analysis
Relevance up to 04:00 UTC--4
Forecast for EUR/USD on May 8, 2025
10:43 2025-05-08
Technical analysis
Relevance up to 04:00 UTC--4
EUR/USD. Analysis and Forecast
11:12 2025-05-08
Fundamental analysis
Relevance up to 01:00 UTC--4
Technical Analysis of Intraday Price Movement of USD/JPY Main Currency Pairs, Thursday May 08, 2025.
09:48 2025-05-08
Technical analysis
Can't speak right now?
Ask your question in the chat.
Widget callback
Callback widget
 

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.