EUR/USD Price Analysis – April 16, 2025
Daily Price Outlook
EUR/USD Rises Toward 1.1400 as Dollar Weakens and ECB Rate Cut Looms
During European trading hours on Wednesday, the EUR/USD pair surged to trade firmly near the 1.1393 mark, recovering from a slight correction seen on Tuesday.
However, the rally was fueled by renewed selling pressure on the US Dollar, pushing the DXY index down to around 99.40. This decline in the Greenback comes as traders grow increasingly doubtful about its long-term appeal amid unpredictable tariff policies and rising inflationary concerns in the US.
EUR/USD Gains Momentum on Weak US Dollar and Tariff Uncertainty
On the US front, the recent weakness in the US Dollar has been driven by escalating concerns over US trade policy, particularly President Donald Trump’s erratic tariff strategy. His recent decision to impose up to 145% tariffs on Chinese goods while pausing others for 90 days has confused markets.
Analysts fear this could push US importers to raise prices on substitutes, thereby fueling inflation and potentially slowing down economic growth. ING analysts predict the EUR/USD could rise toward 1.1500, citing diminishing demand for the USD as a reserve and safe-haven asset and favoring the Euro’s high liquidity.
Investors are now closely watching the US Retail Sales data for March, due later today, which is expected to show a 1.3% increase compared to February’s 0.2%.
Therefore, the stronger reading could briefly support the Dollar, but overall sentiment remains bearish due to structural doubts surrounding US trade and fiscal policy.
Euro Strengthens Ahead of ECB Decision Amid Falling Inflation
On the other side, the shared currency also found support from expectations that the European Central Bank (ECB) will cut its Deposit Facility Rate by 25 basis points to 2.25% during its Thursday meeting. This would mark the sixth consecutive rate cut by the ECB.
Market confidence in a rate cut has risen following a significant slowdown in Eurozone services inflation, which grew just 3.4% year-over-year in March — the slowest pace since July 2022.
Standard Chartered analysts expect the ECB may pause in June, allowing time for Germany’s potential fiscal stimulus and wider EU defense spending plans to become clearer. These developments could influence further monetary policy adjustments in the coming months.
EUR/USD – Technical Analysis
EUR/USD has broken out of a symmetrical triangle pattern after consolidating below $1.1343 for several sessions. The breakout is supported by higher volume and firm bullish candles, pushing price above both the 50-period SMA and a descending trendline resistance. This shift in structure signals a bullish continuation toward the next resistance near $1.1427.
The 50-period Simple Moving Average (SMA), now at $1.1342, has turned upward and is offering early confirmation of trend reversal support. Price is trading decisively above this level, and short-term momentum is picking up.
The Relative Strength Index (RSI) is currently at 65.79, rising steadily but still below overbought territory. This suggests that the breakout is healthy, and further upside may be achievable before buyers begin to fade.
As long as the price remains above the $1.1343 breakout level, bullish pressure is likely to persist. The key upside target lies at $1.1427 — a level aligned with a prior rejection zone. On the downside, a fall below $1.1340 could shift short-term sentiment back to neutral, while a break below $1.1294 would invalidate the current setup.
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