The EUR/USD currency pair is still stuck in a 1.13 to 1.14 trading range. Unfortunately, this trend has persisted for much of the second half of April. As Danske Bank analysts have pointed out, the period of stifled markets continues. They recommend taking a wait-and-see attitude as investors count down to some important economic data—particularly the all-important payrolls report due out tomorrow.
Over the last few trading days, the EUR/USD has been trading on a one-for-one basis with declines in US equities. The S&P 500 index has started to regain lost ground recently, now down only about 2% from its pre-‘Liberation Day’ highs. Much of the resurgence is due to President Trump’s tone on tariffs becoming more conciliatory. This abrupt change in monetary policy direction has led to a more positive risk sentiment from investors. The relationship between US risk sentiment and the performance of the US dollar is starting to reveal itself. This trend illustrates just how inextricably linked these two elements are.
While this risk-on sentiment pervaded yesterday’s stock market, the negative macro prints released yesterday were largely consolidated within a tight trading range for the EUR/USD pair. Analysts observed that the overall forex was mostly unreactive with recent data releases. That would imply that investors are continuing a wait-and-see approach as they look ahead to bigger data releases.
Turning to today, the spotlight will be on the ISM manufacturing report, which could have a significant impact on market sentiment and trading strategies going forward. According to Danske Bank’s FX analysts, this would increase the proclivity of traders to buy dips in EUR/USD. This tactic enables them to make headway in today’s whipsaw rangebound landscape. And today, everyone is waiting on tomorrow’s US jobs report, which has the markets jittery. Traders are closely assessing how it may affect upcoming monetary policy and balance change in the currency pair.
EUR/USD remains stuck in its well-defined range. Overall, as geopolitical headlines, data releases, and risk sentiment continue to shape the market’s outlook. Behind the scenes, more positive-than-expected tariff negotiations have propped up US equities and macroeconomic data still has investors guessing. Traders are looking ahead to tomorrow’s payrolls report. Today should be a day of watchful waiting and calculated positioning.