During the early European session on Friday, EUR/USD remains under modest bearish pressure, trading in negative territory around the 1.0850 level. After experiencing a slight pullback following Wednesday’s rally, the pair struggled to maintain its bullish momentum and closed with a modest decline on Thursday.

The absence of major macroeconomic data releases has kept investors focused on comments from Federal Reserve officials, which have influenced market sentiment towards the US Dollar (USD). The USD staged a rebound on Thursday after the US Department of Labor reported a decrease in weekly Initial Jobless Claims to 222,000, down from the previous week’s 232,000.

Furthermore, cautious remarks from several Fed officials regarding potential policy easing contributed to the USD’s resilience against its major counterparts. Atlanta Fed President Raphael Bostic expressed satisfaction with April’s inflation progress but emphasized that the Fed is not yet ready to consider rate cuts. Cleveland Fed President Loretta Mester and Richmond Fed President Thomas Barkin also highlighted the importance of reviewing more data before making significant policy decisions.

Looking ahead, the US economic calendar lacks high-tier data releases on Friday, with attention turning to speeches from Minneapolis Fed President Neel Kashkari, Fed Governor Christopher Waller, and San Francisco Fed President Mary Daly in the American session. If Fed officials maintain a cautious tone, it could support the USD and hinder EUR/USD from extending its weekly uptrend.

Trade Idea:

Watch for potential opportunities in EUR/USD based on Fed officials’ comments and the USD’s reaction, considering the cautious stance and data dependencies highlighted by policymakers.