EUR/USD recovers as US Dollar gives up some initial gains

• EUR/USD rebounds near 1.1330 while the USD index struggles to break above the main level of 100.00.
• The US dollar is faced with pressure due to a weak insight into the United States economy in the face of Trump's tariff policy.
• ECB officials have warned that inflation risks have sank down the downside.

EUR/USD It got its initial losses after sliding near 1.1285 and flatrated around 1.1330 during European trading hours on Thursday. The main pair of currencies gets land while the Euro (EUR) is outperform against its peers despite the firing of expectations that European Central Bank (ECB) will cut interest rates at the June policy meeting. Entrepreneurs have become more confident that the ECB will reduce the deposit facility rate by 25 basic points (BP) to 2% as many officials have warned about the risks of collapse of eurozone inflation.

ECB officials have expressed concerns that eurozone inflation can emphasize the Central Bank's target of 2%. Policy manufacturers believe that growth will be corrected by the collapse of US President Trump's tariffs and its impact will be “net disinflationary” for the continent.

For fresh inflation clues, investors are awaiting the preliminary eurozone data harmonized index of consumer price (HICP) for April, which will be released on Friday. According to estimates, the HICP headline increased at a moderate speed of 2.1% in the year, slightly lower than the 2.2% increase in March. At the same time, the main HICP, which does not include Pabagu -changing ingredients such as food, energy, alcohol, and tobacco, is expected to grow at a faster speed of 2.5% compared to previous reading of 2.4% ..

At the forefront of the Eurozone HICP, inflation data from its major member states indicated that price pressure was cooled to Germany and France but remained stable in Spain and Italy.

Meanwhile, flash Eurozone The Q1 GDP has come to a stronger expectation on both a quarterly and annual basis. Eurostat reported that the economy grew 0.4% quarter-on-quarter, higher than the expectation of economists and the previous reading of 0.2%. However, Q1 GDP data has not yet reflected the impact of US President Trump's tariffs on vehicles.

Daily -Sun Digest Market Movers: EUR/USD Rebound while US economy is diminishing in the first quarter

• EUR/USD rebounds as The US dollar index (DXY), which monitors the value of the greenback against the six major peers, insists on expanding its two -day recovery above the psychological level of 100.00.
• US Dollar (USD) views look harshly provided by the unexpected retreat to United States (US) Q1 Gross Domestic Product (GDP), softer job growth, and US-China trade uncertainty.
• Data released on Wednesday showed that the US economy was rejected by 0.3% on an annual basis as companies were imported imports from their foreign suppliers to avoid higher tariffs, which US President Donald Trump announced on the so-called “Liberation Day”. This is the first time in three years the US is facing an economic backward in a quarter.
• Morgan Stanley analysts believe that the current GDP data “does not fully reflect the true impact of President Trump's new economic policies”, and warned a “slower labor growth, a flow to inflation and a sharp slowdown in retail expenditure”.
• The US ADP reported on Wednesday that the private sector added 62K fresh workers in April, significantly lower than 108K estimates and the previous release of 147K.
• Meanwhile, comments from White House officials have indicated that US-China's trade war will not be resolved in the near term. US trade representative Jamieson Greer stated in an interview with Fox News On Wednesday that trade discussions in Beijing have not begun since the imposition of reward tariffs, the South China Morning Post (SCMP) reported. Greer made it clear that no official discussion in Beijing was “conducted”.

Technical Analysis: EUR/USD holds 1.1300

EUR/USD strives to hold the main level of 1.1300 in European session on Thursday. The pair returns after a mean-reversion to the near 20-day exponential transfer of average (EMA), trading around 1.1250.

The 14-day relative Index Index (RSI) falls within a range of 40.00-60.00, indicating that the bullish momentum is over today. However, the reverse bias remains still.

Looking, the psychological level of 1.1500 will be the main resistance for the pair. By contrast, 25 September high 1.1214 will be a major support for Euro Bulls.

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