This Week: EURUSD could see one of its biggest daily moves of the year!

• World's most-traded FX pair climbed 1.7% in May

• EURUSD testing support at upper downtrend line

• Bloomberg model: 76% chance of 1.0748 - 1.0958 range this week

• Key events: ECB decision and US jobs report

• EURUSD could see >800-point intraday move

EURUSD has just sealed its first monthly climb of 2024, so far.

The world’s most-traded FX pair advanced by 1.7% in May, with the euro's recovery aided by the softer US dollar as markets pared back bets for Fed rate cuts in 2024.

Although EURUSD has broken above the downtrend line which began at the late-December peak, with said downtrend line in turn offering price support last month ...

EURUSD remains very much in a sideways range for much of the year so far.

Key economic events on either side of the Atlantic this week may dictate whether euro bulls can build on recent gains.

Of course, bulls will be hoping to push EURUSD back above 1.090 for the first time since March.

Bloomberg’s FX forecast model predicts a 76% chance for a 1.0748 - 1.0958 trading range this week.

Upcoming events have the potential to move EURUSD by as much as 0.8% in one day.

If so, that could translate into an 870-point trading opportunity and one of EURSD's top-3 biggest daily moves so far in 2024.

Events Watchlist:

• Thursday, June 6: European Central Bank (ECB) rate decision

Markets widely expect the ECB to cut its rates by 25 basis points this week.

What’s less certain is how many more rate cuts are left for the year (markets now forecast two cuts (50bps) total, including the one this week).

EURUSD could get a massive boost if the ECB unexpectedly leaves its rates unchanged.

Even if the ECB cuts as expected, this FX pair may also seek higher ground if ECB President Christine Lagarde chooses to push back on the notion of one more cut later this year.

• Friday, June 7: US nonfarm payrolls (NFP)

Economists predict the US economy added 180,000 new jobs in May, a slight uptick from April’s 175k. Unemployment is expected to remain the same at 3.9%.

A higher-than-expected headline NFP print, along with a lower-than-3.9% unemployment rate, should strengthen the US dollar on bets that the Fed can’t yet afford to lower its benchmark rates anytime soon.

Such a narrative is likely to drag EURUSD lower back towards 1.08.

Here’s a comprehensive list of other key economic data and events due this week:

Monday, June 3

• TWN index: Taiwan May manufacturing PMI
   
• CNH: China May manufacturing PMI
   
• RUS2000 index: US May ISM Manufacturing

Tuesday, June 4

• ZAR: South Africa 1Q GDP
   
• GER40 index: Germany May unemployment

Wednesday, June 5

• CHINAH index: China Caixin Services PMI
   
• AU200 index: Australia 1Q GDP
   
• SG20 index: Singapore April retail sales
   
• US30 index: US May ADP employment change, ISM services index
   
• CAD: Bank of Canada rate decision

Thursday, June 6

• JP225 index: Japan GDP
   
• AUD: Australia April external trade
   
• EUR: European Central Bank rate decision
   
• USD: US weekly initial jobless claims

Friday, June 7

• CN50 index: China May external trade
   
• EUR: Germany April industrial production and external trade
   
• USDInd: US May nonfarm payrolls