EUR/USD Eyes $1.147 as Traders Await PMI Forecasts and Fed Comments

The EUR/USD is holding steady at $1.139 but traders are preparing for volatility as fresh macro data hits. Today’s flash PMI is the main event for the Eurozone.

Forecasts are mixed:

• French Manufacturing PMI: 47.9 (previous: 48.5)

• German Manufacturing PMI: 47.5 (previous: 48.3)

• Eurozone Composite PMI: 50.4 (previous: 51.0)

Services may still be expanding but manufacturing is still contracting. A weaker than expected print could add to the euro’s recent woes especially with markets convinced the ECB will cut rates as soon as June.

According to LSEG data the probability of a June rate cut has jumped to 75% from 60% a few weeks ago. The ECB’s dovish tone is weighing on sentiment especially as the Fed holds firm.

Dollar Finds Footing on Fed Signals and Trade Developments

Meanwhile the dollar is firm. The Trump administration has taken a more conciliatory tone on trade this week with 18 countries submitting revised offers and 34 in ongoing negotiations. Trump also backed off from his recent criticism of Fed Chair Jerome Powell reducing fears of political interference at the central bank.

Fed officials are also cautious. Governor Adriana Kugler said tariffs could reignite inflation supporting the case for keeping rates steady for now. Later today we hear from Fed members Goolsbee, Waller and Hammack whose comments could influence the rate outlook further.

US PMI data also out today could move the needle:

• Manufacturing PMI (flash): 49.0

• Services PMI (flash): 52.8

If these numbers come in stronger than expected they could reinforce the Fed’s current stance and add pressure on the euro.

EUR/USD Technical Setup: Cautious Optimism with $1.147 in Sight

Technically EUR/USD is consolidating at $1.139 after falling from $1.1637. The pair is finding support at $1.137 where the 50-period EMA on the 4-hour chart is also acting as dynamic support.

The MACD is flattening out so bearish momentum may be fading but bulls need a trigger to get back above.

Trade:

• Entry: Buy above $1.137 on confirmation

• Targets: $1.147 and $1.156

• Stop: Below $1.135

Be nimble today’s PMI and Fed comments could be the trigger for a big move either way. If data is euro friendly we could see a move to $1.147 but if it’s disappointing the downside could open up.