Daily Price Outlook
During the European trading session, the EUR/USD currency pair has slipped to 1.0809, fueled by increasing concerns about President Donald Trump’s proposed tariffs on the European Union (EU) and the Eurozone’s fragile economic outlook.
As these factors weigh heavily on the euro, traders are closely monitoring the situation for any new developments that could influence the currency pair’s direction.
Escalating Trade Tensions: EU Faces Potential Tariffs and Economic Impact
President Trump’s longstanding accusations against the EU for unfair trade practices have escalated into potential tariffs on European goods. The EU, already struggling economically, faces the threat of being one of the hardest-hit regions if these tariffs are imposed.
The Trump administration’s stance is based on the perception that the EU does not purchase enough American goods, and these tariffs could further strain an economy already grappling with stagnation.
Christine Lagarde, President of the European Central Bank (ECB), recently highlighted that the trade conflict could reduce Eurozone growth by 0.5%, signaling a significant challenge for the region.
In response, European Commission President Ursula von der Leyen confirmed that the EU would retaliate with countermeasures if necessary, adding to the uncertainty surrounding the situation.
Slower Inflation and Rate Cut Expectations Pushing the Euro Lower
In addition to the trade tensions, the Eurozone’s economic outlook is growing more pessimistic. Inflation data for March showed core consumer prices rising by just 2.4%, below the expected 2.5%, signaling weaker-than-anticipated price pressures.
This slowdown in inflation, compounded by sluggish economic growth, has raised expectations that the ECB may opt to cut interest rates in the near future to stimulate the economy.
Lagarde has indicated that the battle against inflation is nearly over, but the drop in price growth could indicate that the Eurozone’s recovery might take longer than previously expected.
This growing uncertainty is making traders cautious, further pressuring the euro as speculations about ECB actions continue to mount.
US Economic Data and Trade Worries Heighten Market Anxiety
Across the Atlantic, concerns over Trump’s tariffs are also casting a shadow on the US economy. There are fears that these tariffs could disrupt global business investment, especially as companies adjust to the increased costs and uncertainty.
Recent data, such as the ISM Manufacturing PMI, revealed a contraction in business activity in March, pointing to a slowdown in demand and production.
US Treasury Secretary Scott Bessent also warned that the tariffs could disproportionately affect trading partners, raising concerns that the US economy could suffer as well.
With the ADP Employment Change report for March expected to show a significant jump in jobs (105,000 compared to 77,000 in February), investors are eagerly awaiting these figures, which could offer further insight into the US economy’s resilience.
Therefore, the uncertainty surrounding Trump’s tariffs and the potential slowdown in the US economy could weigh on the US dollar, possibly leading to a weaker dollar and benefiting the EUR/USD pair, driving it higher.
EUR/USD – Technical Analysis
EUR/USD is attempting to stabilize above the $1.0787 mark, a key level near the breakout zone of a descending channel that had previously capped upside momentum throughout March.
Price action is currently consolidating near the 50-period SMA, which sits at $1.0803, acting as dynamic resistance. The RSI has improved modestly to 47.96, suggesting neutral momentum with a slight bullish tilt as it creeps back toward the 50 line.
The pair recently bounced from a low of $1.0740, which held as a critical support area. A confirmed break above the $1.0787 pivot opens the door toward $1.0848—yesterday’s high and the next major resistance.
The short-term structure shows buyers gradually reclaiming lost ground, but sustained bullish momentum requires a clean move above the 50-SMA and break of the recent high.
On the downside, $1.0784 acts as immediate support, followed by the stop-loss buffer at $1.0757 and a more significant support zone at $1.0733. Any breach below these levels would signal weakness and could reignite bearish pressure.
The EUR/USD outlook remains cautiously bullish if price sustains above $1.0787. A break higher could expose $1.0848, while failure risks another dip toward $1.0757.
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