EUR/USD Forex Signal: More Upside Ahead of the ECB Rates Decision – 05 June 2025

Bullish view

-- Buy the EUR/USD pair and set a take-profit at 1.1570.
-- Add a stop-loss at 1.1300.
-- Timeline: 1-2 days.
Bearish view

-- Sell the EUR/USD pair and set a take-profit at 1.1300.
-- Add a stop-loss at 1.1570.

The EUR/USD pair wavered as market participants reacted to key economic data from the United States. It was trading at 1.1415 on Thursday morning ahead of the closely-watched European Central Bank (ECB) decision. The pair was trading at 1.1415, much higher than last month’s low of 1.1060.

ECB interest rate decision

The EUR/USD pair held steady on Thursday as traders reacted to the start of new tariffs on steel and aluminium. These tariffs will effectively block steel from European countries like Germany.

Traders hope that the tariffs will be scrapped when the talks between the two regions conclude. Trump has set a final deadline in January, failure to which he will add more tariffs on European goods.

The European Union has also warned that it will respond to these levies with targeted ones of its own, including on Boeing. There are signs that the European economy is starting to benefit from these tariffs.

For example, China is expected to order about 500 planes from Airbus as it sends a clear message to Donald Trump.

The next key catalyst on the EUR/USD pair will be the upcoming ECB interest rate decision. Analysts anticipate that the bank will deliver another interest rate cut as it tries to offset the impact of tariffs.

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The ECB decision comes a day after data from the bloc showed that the headline Consumer Price Index (CPI) fell below 2% for the first time in months. This decision will come before the latest European retail sales and GDP data.

The other key ; EUR/USD news will be the latest nonfarm payroll (NFP) data on Friday. Economists expect the report to show that the economy created 130k jobs in May, much lower than the 177k it created a month earlier.

A report on Wednesday showed that the private sector created just 37k jobs in May, pushing Donald Trump to push the Fed to cut interest rates.

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EUR/USD technical analysis

The daily chart shows that the EUR/USD pair has bounced back after bottoming at 1.1060 last month. It rebounded to a high of 1.1452, its highest point since April 23, and 12% above the lowest point this year.

The pair has moved above the important support level at 1.1217, the upper side of the cup and handle chart pattern. It has remained above the 50-day moving average.

Therefore, the pair will likely continue rising as bulls target the year-to-date high of 1.1570. Moving above that level will be important for the pair to invalidate the double-top pattern.

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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.