EUR/USD Forex Signal Today 29/05: H&S Setup (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1422.
• Add a stop-loss at 1.1185.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1185.
• Add a stop-loss at 1.1422.

The EUR/USD pair pulled back after the Federal Reserve published minutes of the last meeting. It dropped to the psychological point at 1.1300 as focus now shifted to the upcoming macro data from the US minutes and key economic data

The EUR/USD pair dropped after the Fed published minutes of the last meeting. These minutes showed that officials maintained a wait-and-see approach for clarity on the impact of Donald Trump's tariffs on the US economy.

Officials also noted that the economy faced elevated risks for a higher unemployment rate and inflation because of tariffs. As a result, most members believe that maintaining rates at the current level is the best approach for now.

Economists and Polymarket traders don't expect the Federal Reserve to cut interest rates in the next meetings in June and Julu. The earliest the rate cut will come will be in the September meeting.

The EUR/USD pair also reacted to the latest update on the ongoing EU and US trade. A report by the Financial Times noted that the EU believes that Trump will not end his“reciprocal” tariffs without deeper concessions.

The EU is now facing the unpalatable choice between retaliating against Trump's tariffs or making concessions. The fear among officials is that retaliating will lead to higher duties from the US, where many countries sell goods worth billions a year.

The next key catalyst for the EUR/USD pair will be the upcoming us GDP and initial jobless claims data. While important, these numbers will likely have a muted impact on the US dollar, especially after the FOMC minutes.

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The other top data to watch will come out on Friday, when the US publishes the personal consumption expenditure (PCE) data. This is a key number that looks at inflation in rural and urban areas.

EURUSD Chart by TradingViewEUR/USD technical analysis

The EUR/USD pair pulled back to a low of 1.1300 after the FOMC minutes. It has found support at the 50-period exponential moving average on the eight-hour chart.

The pair has also formed an inverse head and shoulders pattern, a popular bullish reversal sign. It is now trading at the right shoulder. Therefore, the pair will likely have a strong bullish breakout in the coming days. The first target will be the neckline at 1.1422. A move above that level will point to more gains, potentially to the year-to-date high at 1.1575.

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