EUR/USD Forex Signal Today 08/05: Bullish Bias (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1425.
• Add a stop-loss at 1.1250.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1250.
• Add a stop-loss at 1.1425.

The EUR/USD pair moved sideways after the Federal Reserve stuck with its wait-and-see approach in its meeting this month. It was trading at 1.1330 on Thursday morning, where it has remained in the past few days. This price is about 2% below the highest point this year Reserve interest rate decision

The EUR/USD exchange rate remained in a narrow range after the Fed ignored Donald Trump's call for lower interest rates and kept them unchanged between 4.25% and 4.50%.

In his press conference, Jerome Powell, the Federal Reserve Chair, insisted that the bank wanted to wait-and-see the impact of Donald Trump's tariffs. The bank's base scenario is where inflation rises and the unemployment rate rises.

The Fed statement came a week after the US published mixed economic numbers. A closely-watched report by the Conference Board showed that consumer confidence dropped sharply in April as most of them remained concerned about inflation and the labor market.

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Another data showed that the economy contracted by 0.3% in the first quarter as imports surged. For example, the US had a trade deficit of over $140 billion in March as companies rushed to buy products ahead of tariffs.

On the positive side, data by the Bureau of Labor Statistics (BLS) showed that the labor market strengthened in April as the economy added 177K jobs, higher than the median estimate of 120k.

The Fed expects that the US economy will move into a stagflation unless tariffs are removed. Fortunately, there are signs of a potential trade deal between the US and China as officials will meet in Switzerland on Saturday.

The Fed's view has differed from that of the European Central Bank (ECB), which has slashed rates seven time in this cycle.

EURUSD Chart by TradingViewEUR/USD technical analysis

The daily chart shows that the EUR/USD pair has pulled back from the year-to-date high of 1.1570 to 1.1318 as an indecision phase continues. It remains above the key support level at 1.1215, the upper side of the cup and handle pattern.

The pair remains above the 25-day moving average, a sign that bulls are still in control. It is also slightly above the strong pivot release level of the Murrey Math Lines tool.

Therefore, the EUR/USD exchange rate will remain in a bullish trend as long as it is above the support at 1.1215.

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