EUR/USD Price Analysis – March 19, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair failed to stop its downward trend and remained under pressure around the 1.0873 level. However, the decline was driven by a strengthening US dollar, which gained momentum ahead of the Federal Reserve’s upcoming interest rate decision.
Another factor weighing on the EUR/USD pair is the Euro's underperformance, despite Germany’s debt restructuring plan, which raises concerns about inflation and the European Central Bank's cautious approach to monetary expansion.
Impact of Fed's Interest Rate Decision and Market Expectations
On the US front, the broad-based US dollar gained traction as the CME FedWatch tool shows the Fed is likely to keep interest rates steady at 4.25%-4.50%. This would be the second consecutive meeting where the Fed chooses a "wait and see" approach, keeping borrowing rates unchanged.
Market expectations are high that the Fed will stay cautious, especially as they await more clarity on the US economic outlook under President Donald Trump. Investors are increasingly confident in this decision, anticipating no immediate changes to rates.
Euro Weakness Amidst Domestic and Geopolitical Developments
Despite Germany’s approval of a debt restructuring plan aimed at stimulating economic growth and increasing defense spending, the Euro underperformed, contributing to the decline in the EUR/USD pair. The plan is seen as pro-growth for the Eurozone, but it also raises concerns about inflationary pressures.
As the plan progresses, higher inflation could prompt the European Central Bank (ECB) to adopt a more cautious approach to its monetary policy, slowing down its current cycle of expansion.
The ECB has already reduced interest rates six times since June 2024, and the ongoing concerns about inflation have created uncertainty for the Eurozone's economic outlook. These factors combined are weighing heavily on the Euro, making it harder for the currency to gain support despite efforts to boost growth.
As a result, the EUR/USD pair remains under pressure, and market participants are closely monitoring the ECB’s next moves.
Moreover, the impact of US tariff policies remains a significant concern, as President Trump's agenda could worsen price pressures in the Eurozone. US Treasury Secretary Scott Bessent announced that each country will soon receive their specific "tariff" numbers, with April 2 set as an important date for these updates.
EUR/USD – Technical Analysis
EUR/USD is trading around $1.09246, slightly lower as the pair struggles to maintain upward momentum. The currency pair remains under pressure after failing to hold above its $1.09505 pivot point.
Immediate resistance stands at $1.09710, while a move beyond $1.09922 could pave the way for a test of $1.10130. However, with the euro showing signs of exhaustion, upside potential appears limited.
On the downside, $1.09015 serves as immediate support, followed by $1.08735 and $1.08472 if selling pressure intensifies. The 50-day EMA at $1.08945 is offering a dynamic support zone, but a break below this level could accelerate bearish momentum.
The pair is currently facing headwinds from shifting interest rate expectations in both the U.S. and Eurozone. The Federal Reserve’s cautious approach toward rate cuts, combined with stronger-than-expected U.S. economic data, has kept the dollar resilient.
Meanwhile, European Central Bank policymakers have signaled a potential easing cycle later in the year, keeping the euro subdued.
Traders should watch for a break below $1.09505, which could confirm further downside toward $1.09015 and $1.08735.
Conversely, a push above $1.09710 may trigger a short-term rally, but with macroeconomic uncertainty weighing on sentiment, sustained gains could be limited.
For now, EUR/USD remains vulnerable to further downside pressure. If the pair breaches $1.09015, expect sellers to gain control, potentially driving prices toward $1.08735 in the near term.
Related News
- GOLD Price Analysis – March 19, 2025
JOIN LHFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.