FOREX Fundamental analysis for EUR/USD on May 7, 2024The Fed is not going to coordinate the course of monetary policy, relying only on the report of the US labor market. The president of the Federal Reserve Bank of Richmond, Thomas Barkin, believes that the current rate level is sufficient to return the PCE index to the target level. But, in case of overheating of the economy, the Fed knows how to react. If the economy continues to slow down, the regulator will have enough flexibility to prevent a freeze in GDP. In other words, the Fed feels calm and has no plans to change anything. But, that's for now.Forex currency trading is highly dependent on employment data in the United States, which, after the release of the April report, led to the consolidation of the EURUSD even with a favorable background for the euro. The S&P 500 is growing, and government bond yields are declining, in particular due to upcoming auctions, where high demand is expected. This means that interest rates on bonds should fall even lower, which, through the correlation of currencies and rates, puts pressure on the US dollar.On the contrary, the euro is starting to react to positive news. According to World Trade Organization (WTO) estimates, international trade in goods, after a 1.2% decline in 2023, will grow by 2.6% in 2024. The IMF forecasts growth in world trade, including services, by 3%, and the OECD - by 2.3% this year and 3.3% next. Paris believes that positive developments have already proved useful for the export-oriented economy of the Eurozone, which confirms the growth of the indicator in the first quarter by 0.3%.The positive international trade data is not the only factor contributing to the growth of EURUSD. As the US GDP slows and the associated dollar losses, the euro is being helped by the synchronization of global economic growth. Consumer activity in the Eurozone and China is expected to finally accelerate due to the gradual elimination of concerns about the war in Ukraine, the energy crisis and the long-awaited exit from the crisis associated with the COVID-19 pandemic.For a long time, the ECB's forecasts for consumer activity have not been justified. In my opinion, the fears of Europeans, who tend to save more than spend, are to blame for this. However, time heals wounds. Gradually, the world is getting used to the armed conflict in Eastern Europe, and energy prices are not alarming. It's time to fork out. With the slowdown in US GDP growth, the acceleration of its European counterpart becomes a reason to buy EURUSD.Most likely, the divergence of economic growth between the Old and the New World will no longer support the "bears" of the main currency pair so much, and the growing likelihood of monetary expansion by the Fed will create pressure on the US dollar. The EURUSD correction has a good chance of turning into a reversal of the downtrend, although the risks certainly remain.Among them, the acceleration of inflation in the United States should be highlighted, which will force the Federal Reserve to keep rates at the current level for longer than planned. As well as the potential victory of Donald Trump in the presidential election, which would jeopardize the improvement of international trade. For now, it makes sense to buy EURUSD after a breakout of resistance at 1.079 or after a rebound from support at 1.074 and 1.073.EUR/USD Technical analysis for EUR/USDThe EUR/USD exchange rate is declining, correcting the short-term uptrend. A potential target for the bears is the support area (A) 1.0728 - 1.0720. After testing this zone, we suggest looking for points for new purchases of the pair with a target at the maximum from May 3.If, nevertheless, support (A) is broken and EUR/USD is fixed lower, then the corrective decline will continue to the support area (B) 1.0686 - 1.0674. There is also a trend line here, from which we will also consider purchases with the same purpose at the maximum of May 3.