EUR/USD rises slightly while the euro remains stable despite solid expectations of ECB moderation

• EUR/USD is slightly higher than 1,1200, while the US dollar stabilizes before the US Michigan survey data.
• Inflation to the consumer and the US producer, and retail sales remained soft in April.
• Kazaks of the ECB argued in favor of more cuts in interest rates.

EUR/USD It lies slightly higher about 1,1200 during negotiation hours in North America on Friday. The main currency pair advances, while the US dollar (USD) is stabilized after recovering initial losses before the publication of preliminary data of consumer’s feeling and US inflation expectations for May.

The US dollar index (DXY), which tracks the value of the dollar against six main currencies, ranges around 100.80. Earlier in the day, the dollar faced sales pressure, following a strong drop in the yields of the US bonds due to the soft data of the production price index (IPP) and US retail sales on Thursday. The yields of the 10 -year Treasury bonds of the US have dropped more than 3% to about 4.40%, at the time of publication, from its maximum monthly of 4.55% registered on Thursday.

Economic data showed on Thursday that the inflation of the producers, measured by the IPP, was unexpectedly reduced in April, and retail sales barely grew. The remarkable 0.7% drop in services prices led to deflation in the IPP, while the growth in goods prices remained flat. Meanwhile, retail sales increased at a moderate rhythm of 0.1%, compared to a robust growth of 1.5% in March. The data showed that the demand for cars decreased as homes postponed their demand after an increase in sales prices by car dealers to compensate for the impact of tariffs imposed by US president, Donald Trump, foreign cars in March.

This week, US Consumer Price Index (CPI) for April also grew at a slower pace than expected. Theoretically, gentle consumer inflation and the US producer increases the expectations of cuts in interest rates by the Federal Reserve (Fed). However, operators have not increased moderate bets since consumer inflation expectations remain high due to the repercussions of the new economic policies of the US president, Donald Trump.

According to the CME Fedwatch tool, the probability that the Fed maintain stable rates in the range of 4.25% -4.50% in June and July meetings is 91.8% and 61.4%, respectively.

While Washington and Beijing have agreed to reduce tariffs by 115% for 90 days and are looking for a series of negotiations to avoid any escalation in the commercial war, Fed officials believe that the current rate of tariffs remains high enough to cause inflation.

Earlier this week, the president of the Bank of the Fed of Chicago, Austan Goolsbee, said: “The tariffs are still three to five times higher than they were before, so it will have a boost of stagning in the economy. It will make the growth slower and that prices rise.”

What moves the market today: the EUR/USD yields most of the initial profits while the US dollar recovers

• EUR/USD is marginally higher since the euro (EUR) remains in general stable against its peers on Friday. The main currency remains calm even though the operators are increasingly sure that the European Central Bank (ECB) will reduce interest rates again at the monetary policy meeting next month.
• The factors that contribute to the solid moderate bets of the ECB are the confidence that the inflation of the euro zone is on its way to returning to the 2% target of the central bank this year, and the economic panorama is gloomy due to global uncertainty.
• Several ECB officials have argued in favor of continuing with the reduction of interest rates. During the European negotiation hours, the Governing Council member of the ECB, Martins Kazaks, guided a moderate monetary policy perspective by saying that there could be “a couple” of reductions in the deposit rate this year from its current level of 2.25%, Bloomberg reported. However, Kazaks warned that those responsible for politics should not hurry and adopt an “meeting by meeting” approach in the midst of the unclear global situation.
• In the Economic Front, the data of the Gross Domestic Product (GDP) of the first quarter of the Euro zone have been reviewed down, while the change of employment has been maintained. The data showed on Thursday that the economy of the euro zone grew at a slower rate of 0.3%, compared to the preliminary estimate and the previous publication of 0.4%. Intended, GDP growth remained at 1.2%, as expected. Meanwhile, the change of employment in the period from January to March has been higher in 0.3% intertrmetral, compared to preliminary estimates and the previous reading of 0.1%.

Technical Analysis: The EUR/USD struggles to move above 1,1200

EUR/USD It rises about 1,1200 on Friday. However, the short -term perspective of the PAR is still uncertain since the 20 -day exponential mobile average (EMA) acts as a key barrier around 1,1210.

The relative force index (RSI) of 14 periods is strongly recovered at 50.00 after sliding about 40.00, suggesting indecision among the operators.

Looking up, the maximum of April 28, 1,1425 will be the main resistance for the pair. On the contrary, the maximum of March 18, 1,0955 will be a key support for the euros of the euro.