EUR/USD Nears Critical $1.1343 Level: Powell’s Testimony, Tariff Wars, and Inflation Data Could Spark Volatility

The EUR/USD pair is flirting with a make-or-break moment at $1.1343 as traders brace for a trifecta of market-moving catalysts.

Federal Reserve Chair Jerome Powell’s upcoming testimony could either reinforce or undermine the dollar’s recent strength—depending on how hawkish he sounds about rate cuts (or lack thereof).

Meanwhile, renewed US-EU tariff threats loom like a sword of Damocles over currency markets, while inflation data from both sides of the Atlantic threatens to rewrite the playbook.

Will this be the breakout that forex traders have been waiting for? Or just another fakeout in a market that loves to punish overeager bulls? Grab your charts and popcorn—this could get messy.

(And let’s be real—whatever happens, the banks will find a way to profit from your stop losses.)

Strong Jobs Data vs. Tariff Headwinds

April Nonfarm Payrolls came in way above expectations, 177,000 jobs added, vs 130,000 forecast. March was revised up to 185,000. Unemployment rate was steady at 4.2% and wages 3.8% year over year, same as last month.

Under normal circumstances this would be dollar bullish. But Trump’s new plan to impose 100% tariff on foreign produced movies has raised trade friction concerns. Treasury Secretary Janet Yellen warned this could harm the US economy and offset the dollar’s tailwind from jobs data.

Markets will look to the ISM Services PMI later today for more on service sector strength and inflation.

Euro Gets Boost from Inflation Surprise

On the Eurozone side, inflation data was slightly positive. Headline inflation was 2.2% as expected. Services inflation was 3.9% and CORE inflation 2.7%. This doesn’t kill the ECB rate cut expectations but suggests the pace might be more gradual than assumed. Traders now price in 60 bps of ECB cuts by year end, down from earlier estimates.

EUR/USD Technical Outlook: Key Levels

EUR/USD is stuck below the trendline and has resistance at $1.1378. A break above $1.1343 could take it to $1.1424. Below $1.1297 look for weakness. MACD is not showing much momentum so be patient.