EUR/USD Price Analysis – March 26, 2025
Daily Price Outlook
During the European trading hours on Wednesday, the EUR/USD pair climbed towards 1.0780, benefiting from a weaker US dollar.
The Greenback came under pressure following disappointing US economic data and rising uncertainty surrounding President Donald Trump’s trade policy.
Although, the upside remains limited due to the ECB’s dovish tone. Traders will closely monitor upcoming US economic data and any developments regarding Trump’s trade tariffs, which could influence the next moves in the currency market.
US Economic Data Signals Weakness, Weighing on the Dollar
On the US front, the broad-based US dollar remained on the back foot after Tuesday’s release of weak consumer confidence data.
The Conference Board reported that US consumer confidence dropped to its lowest level in more than four years in March, reflecting heightened concerns over economic slowdown and policy uncertainty.
This has fueled speculation that the Federal Reserve might consider further policy adjustments to support economic stability.
On the flip side, Investors remain cautious as uncertainty looms over Trump’s reciprocal tariff plans set for next week.
On Monday, Trump hinted that not all tariffs would be imposed on the April 2 deadline and that some countries might receive exemptions, but he provided no further details.
The lack of clarity has heightened market anxiety, adding to pressure on the US dollar and contributed to the EUR/USD pair losses.
ECB Dovish Signals Could Cap Euro Gains
Despite the US dollar’s weakness, the dovish signals from the European Central Bank (ECB) could limit the euro’s upside trend.
ECB Governing Council member Francois Villeroy de Galhau suggested on Tuesday that there is still room for further rate cuts, indicating that the deposit rate could decline from 2.5% to 2% by the end of summer.
ECB policymaker Fabio Panetta stressed the need for a data-driven approach, noting that as inflation falls and interest rates reach neutral levels, policy decisions become more uncertain. This suggests the ECB may take a cautious stance, potentially slowing the euro’s rise against the US dollar.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.07875, posting a slight gain of +0.02% in early European hours. Despite the modest uptick, the currency remains below its pivot point at $1.08058, signaling that bearish sentiment still lingers as price action struggles to gain upside traction.
The 4-hour chart shows price comfortably beneath the 50-period EMA at $1.08608, further reinforcing near-term downside pressure.
Immediate resistance is located at $1.08544, aligning closely with the 50 EMA, followed by additional barriers at $1.08841 and $1.09177. Bulls would need a decisive break above these levels to reassert control, but current momentum indicators suggest a lack of conviction from buyers.
On the downside, $1.07656 serves as immediate support, followed by $1.07214 and $1.06780, levels that could come into play if selling accelerates below the pivot.
Given the current technical structure, a short bias remains favored below $1.08056, with a tactical sell setup targeting $1.07433, and a stop loss positioned at $1.08368 to manage risk. RSI and MACD indicators lean neutral to slightly bearish, with no clear signs of reversal yet.
In summary, while price hovers just below key resistance, the path of least resistance appears to favor sellers unless buyers reclaim ground above the $1.085 level with conviction.
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