EUR/USD Price Analysis – April 11, 2025
Daily Price Outlook
During the European trading session on Friday, the EUR/USD currency pair extended its bullish momentum and surged to the intra-day high of 1.1473, touching its highest level in three years. However, the sharp rally was driven by growing pressure on the US Dollar amid escalating trade tensions and renewed support for the Euro following the European Union’s decision to pause counter-tariffs against the United States.
EUR/USD Rally Fueled by Intensifying US-China Trade War and EU’s 90-Day Tariff Pause
However, the major catalyst behind the surge in EUR/USD was the market’s reaction to China’s decision to hike tariffs on US goods to 125% from 84%, a move that deepened fears of a prolonged US-China trade war.
This escalation has heightened the risk of a US recession, prompting investors to price in a more dovish outlook for the Federal Reserve.
At the same time, the Euro found additional support after the European Union announced a 90-day pause on countermeasures against US tariffs.
This move followed President Trump’s earlier decision to suspend planned tariffs on multiple countries, signaling a potential thaw in transatlantic trade tensions and boosting confidence in the Eurozone’s economic outlook.
EUR/USD Supported by Fed Rate Cut Bets and Dovish Outlook
Traders are increasingly betting on a shift in US monetary policy, with expectations rising for an interest rate cut by the Federal Reserve. The trade war risks, coupled with softening US economic indicators, have pushed markets to anticipate a more accommodative Fed stance in the coming months.
Fed officials, including St. Louis Fed President Alberto Musalem and New York Fed President John Williams, are scheduled to speak later on Friday.
Their comments will be closely watched for clues on future rate policy, especially as investors await the US Producer Price Index (PPI) for March and the Michigan Consumer Sentiment report.
A stronger-than-expected reading could provide some support to the US Dollar and limit further EUR/USD gains.
Eyes on US PPI, Consumer Sentiment, and Fed Commentary
Looking ahead, traders are now focused on upcoming US data, including the Producer Price Index (PPI) for March and the preliminary Michigan Consumer Sentiment Index. Both reports are scheduled for release later today and will be closely watched for clues on inflation and consumer confidence.
Moreover, the comments from Fed officials, including St. Louis Fed President Alberto Musalem and New York Fed President John Williams, could offer fresh insight into the central bank's policy path.
Hence, the stronger-than-expected set of data or a hawkish tone from Fed speakers may limit EUR/USD’s upside in the near term, but for now, the pair remains firmly in bullish territory.
EUR/USD – Technical Analysis
EUR/USD continues its bullish breakout, pushing toward the $1.13830 region after clearing the key $1.12804 pivot. The pair is riding a strong upside channel, supported by a steep RSI climb currently at 76.22—well into overbought territory. Still, momentum remains in the bulls’ favor following yesterday’s soft U.S. inflation data, which weighed on the dollar and bolstered euro demand.
Price is now pressing against immediate resistance near $1.13830, with the next target at $1.14111. A sustained break above this level could expose the $1.14483 zone. On the downside, $1.12804 now acts as a critical support level, and below that, $1.12021 is the line in the sand for short-term bulls.
Technically, the pair is well supported above the 50 SMA, currently at $1.10382, and has room to run if risk sentiment stays upbeat. However, with RSI flashing overbought, traders should be cautious of short-term pullbacks or profit-taking near the highs. Momentum remains strong but needs confirmation through a daily close above $1.14111.
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