EUR/USD Price Analysis – March 17, 2025
Daily Price Outlook
EUR/USD extended its upward trend and remained well bid around 1.0910 during European trading hours on Monday, as investors awaits for the Federal Reserve’s (Fed) upcoming interest rate decision on Wednesday. The currency pair traded in a tight range as market participants sought clarity on the Fed’s monetary policy outlook.
Impact of Fed's Policy and Economic Uncertainty on EUR/USD Pair
On the US front, the broad-based US dollar has been losing traction despite expectations that the Federal Reserve will keep interest rates steady at 5.25%-5.50%.
However, investors are more focused on the Fed’s "dot plot," which gives clues about future rate changes. In the last meeting, Fed officials predicted three rate cuts this year, so traders will be watching closely to see if that changes.
Another key focus will be Fed Chair Jerome Powell’s comments on economic growth, jobs, and inflation. If he hints at any shift in policy, it could impact the dollar and financial markets.
Meanwhile, uncertainty is rising due to concerns over potential tariff policies under former US President Donald Trump.
Adding to the worries, US Treasury Secretary Janet Yellen recently suggested that the government may need to adjust its spending to avoid financial risks. This has raised fears about possible economic disruptions in the coming months.
Therefore, the EUR/USD pair may strengthen if the Fed signals delayed rate cuts or economic concerns rise. However, uncertainty over US policies and spending risks could limit gains, keeping the pair volatile.
Euro Strengthens Amid German Fiscal Expansion and Geopolitical Developments
Across the ocean, the shared currency remained firm as German leaders agreed to establish a 500 billion Euro infrastructure fund and ease borrowing restrictions through changes in the ‘debt brake’ rule.
This move, expected to be approved in the lower house of Parliament on Tuesday, is seen as a significant step to boost economic growth.
However, the Reuters poll conducted from March 10-14 showed that economists raised their Eurozone growth forecasts for 2026 from 1.2% to 1.3%, reflecting optimism over Germany’s fiscal expansion.
Apart from this, positive developments in Russia-Ukraine peace talks have further supported the Euro. Donald Trump is set to meet Russian President Vladimir Putin on Tuesday to discuss a ceasefire, following Ukraine’s acceptance of a 30-day truce after negotiations in Saudi Arabia.
EUR/USD Faces Risks from US-EU Trade Tensions and Fed Policy Outlook
Despite EUR/USD’s recovery, the escalating trade tensions between the US and the European Union (EU) pose a risk to the Euro’s gains.
On Thursday, Trump threatened to impose 200% tariffs on European alcohol imports, retaliating against the EU’s proposed tariffs on US goods in response to a 25% levy on steel and aluminum.
ECB Vice President Luis de Guindos warned that a full-scale trade war would negatively impact global economic growth, stating, “Trade war is bad news for the world economy, everyone loses in that situation.”
EUR/USD – Technical Analysis
EUR/USD is trading at $1.08763, holding steady but slightly pressured below the $1.08844 pivot point. The pair is consolidating in a narrow range as traders await key economic cues, with immediate resistance at $1.09314 and support at $1.08297.
The 50-day EMA at $1.08839 is acting as a dynamic barrier, reinforcing a potential bearish outlook if price action fails to reclaim higher levels.
A break below $1.08844 could confirm downside pressure, with sellers eyeing the next support zones at $1.08297 and $1.07966.
A sharper decline could expose $1.07650, a level that aligns with previous demand zones. On the upside, if EUR/USD rebounds and breaks above $1.09314, bullish momentum could extend toward $1.09710 and $1.10065.
Traders should monitor $1.08844 closely. A sustained move below this level would reinforce selling momentum, while a recovery above $1.09314 could shift sentiment toward further gains.
Related News
- GOLD Price Analysis – March 17, 2025
JOIN LHFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.