The EUR/USD price analysis leans bullish with the euro firm after the ECB failed to give clear guidance on the outlook for rate cuts. On the other hand, the dollar was near an 8-week low as investors geared up for the US nonfarm payrolls report.

The European Central Bank cut interest rates for the first time since 2019, becoming the second major central bank to do so. The move came as policymakers gained confidence that inflation in the bloc was under control. The ECB has been fighting price increases since 2022 when inflation was 10%. Fortunately, the central bank has lowered this figure to just above the 2% target.

However, they did not expect it to remain stubborn at this level. The last inflation report was hotter than expected, which was the main reason policymakers were cautious after the policy meeting. Investors had expected some guidance on the future. However, Lagarde refrained from committing to a rate-cutting path, noting that inflation and wage growth remained strong. 

Some analysts believe the ECB was too quick to commit to a rate cut before the last inflation report. Moreover, forecasts released by the central bank show inflation staying above the 2% target until late next year. After the meeting, markets were pricing in only one more rate cut this year, likely in September.

Meanwhile, there was caution ahead of the US nonfarm payrolls report, which will give insight into the Fed’s policy path. Economists expect an increase of 182,000 jobs in May. Therefore, anything bigger or smaller could cause a lot of volatility in the market.

EUR/USD key events today

• US nonfarm payrolls report

EUR/USD technical price analysis: Choppy near 30-SMA

(Click on image to enlarge)

EUR/USD 4-hour chart

On the technical side, the EUR/USD price has respected the 30-SMA support and trades above the 1.0880 key level. Moreover, the RSI has remained above 50 since the bulls took over, supporting solid momentum. 

However, the price remains close to the SMA, which could indicate hesitation among bulls to move higher. If this hesitation continues, the bears will likely return and take control with a break below the SMA. However, if it is only a pause, the price will soon climb to make higher highs beyond the 1.0925 level.

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