Disappointing US economic indicators triggered broad Dollar selling pressure
Revised GDP figures confirm economic contraction while jobless claims exceed forecasts
Markets now anticipate nearly 50 basis points in Fed rate reductions before year-end
The Solana price prediction RedditEUR/USD pairing demonstrated remarkable resilience during Thursday's trading session, recovering from weekly lows near 1.1210 to achieve gains exceeding 0.70%. This upward movement coincided with underwhelming employment statistics from the United States, coupled with downward revisions to first-quarter growth figures. The combination of these factors exerted significant pressure on the US currency while simultaneously boosting the Euro's appeal among forex participants.
Fresh economic reports revealed an unexpected increase in unemployment benefit applications, with the Labor Department documenting 240,000 new claims for the week concluding May 24. This figure surpassed both previous readings and consensus estimates, signaling potential softening in the labor sector. Simultaneously, revised calculations for economic expansion during the initial quarter of 2025 confirmed a 0.2% contraction, marking a substantial downward adjustment from earlier projections.
Market participants responded to these developments by adjusting their expectations for monetary policy adjustments. Current pricing in futures markets suggests traders now anticipate approximately two quarter-point reductions in the federal funds rate before December. This shift in sentiment contributed to declining Treasury yields, further diminishing the Dollar's relative attractiveness.
The housing sector provided additional concerning signals, with April's pending home sales registering their most significant monthly decline since late 2022. These collective indicators pushed the US Dollar Index (DXY) down 0.57% to 99.30, reflecting broad-based weakness against major counterparts.
European economic calendars remained relatively quiet during the session, though market attention turns toward upcoming inflation readings from Germany and Italy. These continental indicators, scheduled for release on Friday, could provide crucial guidance regarding the European Central Bank's policy trajectory following its anticipated June rate reduction.
Stateside, forex traders await the latest Core PCE Price Index figures - the Federal Reserve's preferred inflation metric. Economists project a modest deceleration in price pressures for April, which could influence the central bank's policy deliberations.
Weekly Currency Performance Overview
The Euro demonstrated particular strength against the Japanese Yen this week, while showing mixed performance against other major currencies. The following analysis examines relative currency movements across forex markets.
Currency cross-rates reveal the Euro's varied performance against global counterparts. When evaluating currency pairs, remember that percentage changes reflect the base currency's movement relative to the quoted currency. For instance, selecting EUR as the base and USD as the quote displays the Euro's fluctuation against the Dollar.
Key Drivers Behind EUR/USD Movement
Unemployment benefit applications rose to 240,000, exceeding forecasts and previous figures, indicating potential labor market cooling
Revised GDP calculations confirmed economic contraction, contrasting sharply with prior expansion estimates
Recent judicial rulings questioned the legality of certain trade measures, adding to economic uncertainty
Federal Reserve officials expressed heightened concerns about persistent inflation coinciding with weakening growth indicators
Money markets fully price in a 25 basis point ECB rate reduction at the upcoming June policy meeting
Technical Perspective: EUR/USD Approaches Key Resistance
The EUR/USD pairing's technical structure suggests potential for continued upward movement following Thursday's rebound. Buyers emerged near 1.1210, propelling the exchange rate toward significant resistance around 1.1400. A successful breach of this barrier could open the path toward April's peak near 1.1547, with the annual high at 1.1572 representing the subsequent target.
Conversely, failure to maintain momentum above 1.1300 might trigger a retest of support levels, beginning with the 20-day moving average near 1.1269. Additional downside protection emerges around the 50-day moving average at 1.1183, which previously contained selling pressure.
Market participants should monitor upcoming economic releases closely, as fresh fundamental data could determine whether the current technical setup translates into sustained directional movement or proves temporary. The interplay between weakening US indicators and evolving ECB policy expectations will likely dictate near-term price action.