Eurusd declines 0.55% amid consolidation and Eurozone inflation slowdown

EURUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.55%	-62.7 Pips
Week to-date	0.26%	30 Pips
June	0.27%	31 Pips

Upcoming key events (London Time)

Thu 01:15 PM EUR ECB Interest Rate on main refinancing operations (MRO)
Thu 01:15 PM EUR ECB Interest Rate on deposit facility

What happened lately

In the United States, April 2025 witnessed a slump in new orders for manufactured goods, declining by 3.7% compared to a downwardly revised 3.4% in the previous month. This points to a potential cooling in industrial demand and may reflect supply chain disruptions or shifts in demand patterns. Conversely, the U.S. labor market showed signs of robustness, with the JOLTS data indicating an increase in job openings, rising to 7.391 million in April from a revised 7.2 million in March. This increase suggests that demand for labor remains strong, which could, in turn, support consumer spending and economic growth.

In the Euro Area, inflationary pressures appear to be easing. The flash estimate for the Core Harmonised Index of Consumer Prices (HICP) dropped to 2.3% in May 2025 from 2.7% in April. Meanwhile, the Harmonized Index of Consumer Prices (HICP) for the same period showed zero growth for both the one-month rate and the core reading, a significant decline from April’s figures of 0.6% and 1%, respectively. The yearly HICP also decreased to 1.9% from 2.2%. Although this indicates reduced inflationary pressures, which can be beneficial for consumers, it also poses challenges for the Eurozone’s central bank concerning interest rate decisions. Nonetheless, the economic environment shows stability in the employment sector, as the unemployment rate decreased slightly to 6.2% in April from a revised 6.3% in March.

The EURUSD exchange rate has experienced a decline, slipping by 0.55% to 1.13750 recently amidst consolidation. Considering the slowdown in Eurozone inflation and the impending European Central Bank’s (ECB) rates decisions scheduled for Thursday, the euro faces downward pressure. If the ECB decides to maintain or lower rates due to subdued inflationary signals, EUR could weaken further against the USD, particularly when contrasted with the strength in the U.S. labor market. Moreover, the rising job openings in the U.S. present a buoyant economic picture, enhancing the attractiveness of the dollar. Until the ECB reveals its monetary stance, the EURUSD pair might continue to tread water, moving cautiously within its current consolidation range.

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What can we expect from EURUSD today?

EURUSD on Tuesday dropped -0.55% to 1.13750. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.1341 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.14546 or trades above daily pivot 1.13978. Break above could target R1 at 1.14318. While to the downside, we are looking at 1.1341 (S1) and daily low of 1.13638 as support levels. EURUSD need to break on either side to indicate a short-term bias. A close below 1.13638 would indicate selling pressure.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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