The macroeconomic environment on both sides of the Atlantic is weighing on the EURUSD pair.
In its spring outlook, the European Commission revised its previous expectations downward. According to the latest data, GDP growth will reach only about 0.9% in 2026 instead of 1.2%. At the same time, inflation could surge above 3.0%. The consequences of the energy crisis, combined with weak demand in the services sector, are largely to blame for this gloomy picture. Under these circumstances, the European Central Bank (ECB) held interest rates steady at 2.15%, offering no clear signals of future monetary tightening.
Across the ocean, the situation looks more optimistic. The US Federal Reserve (Fed), now chaired by Kevin Warsh, remains quite hawkish, keeping borrowing costs at 3.75%. A robust labor market and strong retail sales data have provided solid support for the American dollar. Expectations regarding further easing of monetary conditions are currently shifting toward a less aggressive scenario. Geopolitical risks related to Iran are also giving the greenback a boost.
Given these macroeconomic factors, the dollar has a lot more benefits than its European counterpart. As a result, the pair is likely to decline in the near term, with the next downside target at 1.15000.
The final recommendation:
— Sell EURUSD at the current price, aiming for 1.15000 within a month.
— Place a Stop Loss order at 1.16700, just above the resistance level, to manage risks in case the market moves against us.
This content is for informational purposes only and is not intended to be investing advice.
