Forex Analysis & Reviews: 29.04.2025 - The Euro Looks for a Basis...

Live Chat

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex Loprais Team - Official participant of the Dakar rally

29.04.2025 12:54 AM

The Euro Looks for a Basis for Another Upward Surge

Business activity indices in the eurozone are declining amid heightened uncertainty. The composite index in April fell from 50.9 to 50.1, nearing contraction territory.

At the same time, Germany's Ifo Business Climate Index rose, as did the current conditions index, while only the expectations index slightly declined, reflecting uncertainty about the future.

As inflation in the eurozone continues to decrease, the European Central Bank faces the need to cut rates in June. However, according to Reuters, there is little enthusiasm for taking this step. The EU has yet to respond to the introduction of 20% tariffs, while business activity growth is slowing, and the pace of average wage growth has significantly declined.

Confidence in the dollar has been undermined by the rapid moves of U.S. President Trump, which, in turn, contributed to lower inflation in the eurozone against the backdrop of a strengthening euro. All these factors argue in favor of a rate cut, which could put pressure on the euro. ECB officials' comments are generally optimistic: for example, last week, Christine Lagarde stated that "the disinflation process is progressing so successfully that it is nearing completion." At the same time, Klaas Knot, President of the Dutch Central Bank, believes that although economic growth will slow in the short term, inflation will also become more subdued.

The news is mostly negative, but expecting a 50-basis-point cut in June appears insufficient. At the same time, a 25-basis-point cut is already priced in by the markets, making it unlikely to be a serious bearish factor for the euro. If the dollar were in good shape, the EUR/USD pair would likely have already found an opportunity to turn south, but for now, there is no apparent reason for such a reversal. Political factors, especially trade negotiations, may play a role, but both sides exercise caution and avoid sharp statements.

The net long position on the euro decreased by $0.5 billion to $9.3 billion over the reporting week. Positioning remains bullish, and the fair value once again indicates the possibility of developing bullish momentum.

The euro has lost momentum and is consolidating near the recent high. However, signs of a downward movement have diminished. A week ago, we assumed that EUR/USD would decline to the 1.1210 support level and potentially break lower, but the growing weakness of the dollar once again calls this scenario into question. A decline toward 1.1210 remains possible, but using it as an opportunity for new purchases seems more appropriate as the signs of resumed growth have strengthened. We expect an attempt to test the recent high at 1.1575.

At the same time, in the longer term, the euro's strength appears less convincing. Market sentiment suggests that the ECB could lower the deposit rate to 1.5% by the end of the year. In that case, even considering problems in the U.S. economy, the euro would struggle to compete against the dollar, which would offer a significantly higher yield — unless, of course, by that time, recession signs in the U.S. become more evident and force the Fed to cut rates more aggressively.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.