Daily Price Outlook
During the European trading session, the EUR/USD currency pair moved upward, reaching close to the 1.1065 level. This rise happened as the US Dollar (USD) weakened against the Euro (EUR) following the implementation of US President Donald Trump's new tariff policy.
The market is also waiting for more clues about the US economy, with the release of the Federal Open Market Committee (FOMC) Minutes and comments from Federal Reserve (Fed) official Thomas Barkin. These events have added uncertainty and are keeping traders cautious.
US Tariffs Weigh on Dollar, Boosting EUR/USD Amid Global Trade Concerns
On the US front, a new wave of tariffs came into effect on Wednesday morning, introduced by the Trump administration on imports from 86 countries. These tariffs range between 11% and 84% and apply to a wide variety of products. This move has increased global trade tensions and raised concerns about a possible recession due to Trump's protectionist policies.
As a result, the US Dollar has come under pressure. With the USD weakening, the Euro is gaining strength, which is helping push the EUR/USD pair higher. Investors are becoming more worried about the long-term impact of these tariffs, as they could lead to deeper global trade conflicts and slow down the global economy.
ECB Rate Cut Expectations Limit Euro's Upside Despite EUR/USD Gains
On the European side, the rise in the EUR/USD pair is being tempered by growing expectations that the European Central Bank (ECB) will cut interest rates soon. The ECB's decision is largely driven by concerns that Trump’s tariffs could push the Eurozone into recession.
Investors are now pricing in a nearly 90% chance of a 25 basis point rate cut at the ECB's upcoming policy meeting on April 17, according to Bloomberg data. This sentiment has increased from 70% in previous weeks, reflecting mounting fears of a slowdown in the Eurozone economy.
Despite these concerns, the market is cautious about how much further the EUR/USD can climb, as any rate cut by the ECB might cap the upside for the Euro. The central bank's rate-cutting measures are expected to provide some relief to the economy but could also limit the EUR’s upward momentum.
Traders Eye FOMC Minutes and Fed Comments Amid Trade Tensions and ECB Policies
Looking forward, traders will closely watch the FOMC minutes and any comments from Federal Reserve (Fed) officials to understand the possible direction of US monetary policy.
The market is especially focused on how the Fed might react to rising trade tensions and increasing fears of a recession.
The ongoing global trade conflict, along with the European Central Bank’s (ECB) dovish approach, may continue to put pressure on the US Dollar and support gains in the EUR/USD pair over the next few days. (edited)
EUR/USD – Technical Analysis
EUR/USD is holding firm above the $1.1016 breakout zone, with bullish momentum picking up after a period of consolidation. The pair is trading around $1.1054, continuing its upward move after bouncing off trendline and 50-SMA support near $1.0906. This area remains a key inflection point for buyers, as it aligns with the broader ascending trendline visible since early March.
A clear break above $1.1016 has shifted near-term sentiment back in favor of the bulls. The next immediate resistance stands at $1.1147, which also aligns with last week's swing high. A break above that could open the door toward $1.1220 and eventually $1.1293 if upside momentum continues.
On the flip side, $1.1016 now serves as a short-term support level, with a protective cushion at $1.0938. Below that, $1.0906 marks the base of the current bullish structure.
The Relative Strength Index (RSI) is printing at 62, suggesting strong bullish momentum but not yet in overbought territory. This leaves room for the rally to continue, especially if the pair can sustain above $1.1016 through the upcoming sessions.
The setup remains constructive, favoring long positions above $1.1016 with a take-profit target near $1.1147 and a stop-loss placed at $1.0938. A break below $1.0938 would likely invalidate the current bullish bias and put pressure back on the $1.0906 zone.
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