Market participants are likely to keep a close eye on the euro’s upside potential following the ECB announcement

Market participants are likely to keep a close eye on the euro’s upside potential following the ECB announcement

06.06.2025

In yesterday’s U.S. currency trading, the Canadian dollar rose against the yen. The CAD/JPY pair climbed from 104.263 to 105.350. On the hourly chart, the price moved from the -2σ to the +3σ Bollinger Bands. On the 4-hour chart, the price is forming higher highs while finding support at the 75-period moving average (MA). On the daily chart, it has already broken above the 20-period MA—which had previously crossed over—and is currently rising toward the 200-period exponential moving average (EMA).

European currencies rose after yesterday’s ECB policy rate announcement. Although the central bank cut its policy rate by 0.25%, it noted that “inflation returning to 2% is a positive development,” and the market interpreted this as a signal that rate cuts would pause, causing the euro to climb following the announcement. The EUR/USD pair rose from 1.1403 to 1.1494, with the rally tracking the 20-period moving average on the hourly chart.On the daily chart, the 10-day moving average is acting as support, and the pair appears to be entering an uptrend.

Today's economic indicators include: Japan's All-Household Household Expenditure Survey and Economic Sentiment Index at 2:00 PM; Germany's Industrial Production and Trade Balance, and the UK's Halifax House Price Index at 3:00 PM; and France'sIndustrial Production, at 17:30: Eurozone remarks by ECB President Lagarde, at 18:00: Eurozone Real GDP and Eurozone Retail Sales, at 21:30: U.S. Employment Report and Canadian Employment Report, and at 23:00: Remarks by U.S. Federal Reserve Governor Bowman. We will closely monitor the euro’s upside potential following the ECB announcement.