• The EUR/USD forecast shows a softer euro due to increasing ECB rate cut bets.
• The euro has gained over 4% in April due to a weak dollar.
• The US will release its monthly employment report.

The EUR/USD forecast shows a softer euro near mid-1.13 amid an increasing likelihood of another ECB rate cut in June. Meanwhile, the dollar remained steady after its rebound last week, driven by hopes of a trade deal between China and the US. 

The European Central Bank recently lowered borrowing costs, noting that Trump’s tariffs would negatively impact growth. As a result, market participants moved to price more rate cuts in the coming month. ECB governors at the IMF and World Bank Spring Meetings noted that growth in the Eurozone was declining. Moreover, policymakers have shown their willingness to cut rates by another 25-bps in June. 

Nevertheless, the euro has gained over 4% in April due to a weak dollar. Trump’s activities since taking office have eroded investor confidence in the US economy, hurting the greenback. However, last week, the US currency found some shine as tensions between China and the US eased. The US is ready to lower tariffs on China to start negotiations. Meanwhile, China is prepared to exempt some US goods from tariffs.

This week, traders will be watching for developments in US trade policy and key economic data. The US will release its monthly employment report.
 

EUR/USD key events today

Market participants do not expect any key economic releases from the Eurozone or the US. Therefore, the pair might start the week quietly.

EUR/USD technical forecast: Downtrend looms below the 1.1301 support 

(Click on image to enlarge)

EUR/USD 4-hour chart

On the technical side, the EUR/USD price trades in a tight range between the 30-SMA and the 1.1301 support level. However, since the price trades below the SMA, the bias is bearish. At the same time, the RSI is under 50, indicating stronger bearish momentum. 

The EUR/USD recently turned bearish after the price failed to break above the 1.1550 resistance level. Initially, bulls had maintained an upward trajectory, making higher highs and lows. At the same time, the price had started respecting support and resistance levels that formed a bullish channel. 

However, this changed when bears broke below the channel support and the 30-SMA. Still, the price must break below the 1.1301 support to make a new low and confirm a new downtrend. Such an outcome would clear the path to the 1.1002 key level.

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