EUR/USD Price Analysis – March 31, 2025

Daily Price Outlook

The euro (EUR) rebounded strongly, with EUR/USD rising to near 1.0820 during North American trading hours. The recovery follows reports that the European Commission (EC) is preparing trade concessions to ease tensions with the United States, ahead of a formal tariff announcement by President Donald Trump scheduled for Wednesday.

According to Bloomberg, the European Union is working to identify concessions it is willing to offer in exchange for partial removal or delay of U.S. tariffs—particularly the 25% levy on foreign automobiles set to take effect on April 2.

This diplomatic overture could help de-escalate fears of a full-scale Eurozone-U.S. trade war, especially for export-heavy sectors like German automakers. Germany sends roughly 13% of its auto exports to the U.S., and the proposed tariffs could seriously dent their global competitiveness.

“We regret the 25% auto tariffs and the new measures coming on April 2, but we are preparing for all of these,” said EC spokesperson Olof Gill. He described Europe’s potential response as “timely, robust, and well-calibrated.”

Officials Warn of Global Fallout from Auto Tariffs

The backlash from Europe has been swift. German Chancellor Olaf Scholz condemned the tariff policy, calling it a “lose-lose situation” that undermines global prosperity. Echoing that view, ECB Vice President Luis de Guindos warned that while the inflationary impact of tariffs may be temporary, the damage to growth could be long-lasting.

“The worst outcome is a vicious circle of tariffs and retaliation,” de Guindos said, adding that trade disruptions are “extremely detrimental” to Eurozone growth.

His comments come amid growing monetary policy uncertainty. De Guindos said it was “very difficult to say” what the ECB might decide in April, citing fluid economic conditions.

Mixed Economic Data from Eurozone

Further complicating the outlook, preliminary March inflation figures from France and Spain disappointed:

France CPI (EU Norm): +0.9% YoY (vs. 1.1% est.)

Spain HICP: +2.2% YoY (down from 2.9%)

The weaker-than-expected inflation data could give the ECB more flexibility, but also reinforces concerns about stagnating demand within the Eurozone.

U.S. PCE Data Boosts Fed Dilemma

Across the Atlantic, inflation remains sticky. Core PCE inflation—the Federal Reserve’s preferred inflation gauge—rose 2.8% YoY in February, above the 2.7% forecast and January’s 2.6% print. On a monthly basis, core PCE climbed 0.4%, also exceeding expectations.

Despite the upside surprise, the U.S. Dollar Index (DXY) slipped toward 104.00, as traders adjusted positions ahead of potential Fed rate commentary.

Boston Fed President Susan Collins acknowledged that tariffs are “likely to increase inflation in the near term,” though she sees the rise as potentially short-lived. Still, she advocated for “active patience,” suggesting the Fed will likely hold rates in the 4.25%–4.50% range for an extended period.

EUR/USD Outlook: All Eyes on April 2 and Fed Guidance

As markets brace for Trump’s formal auto tariff announcement on Wednesday, volatility is expected to remain elevated. If the EU’s proposed concessions gain traction, EUR/USD could build on its recovery. However, failure to secure a diplomatic resolution—especially with tariffs hitting major Eurozone exports—could quickly reverse gains.

Simultaneously, traders will continue parsing U.S. inflation data and Fed signals, with rate expectations playing a pivotal role in shaping currency direction through Q2.

EUR/USD – Technical Analysis

The euro is showing signs of a trend reversal after a decisive breakout above the descending channel that had constrained price action since mid-March.

Trading at $1.08217, EUR/USD has cleared the key pivot level of $1.08120, signaling renewed bullish interest and a potential shift in short-term market sentiment.

The move comes after a sharp rebound from the $1.07585 level, backed by a breakout above the 50-period SMA ($1.07913), now acting as dynamic support.

The recent rally is technically significant, as it follows weeks of downward momentum and coincides with a strong RSI rebound.

The Relative Strength Index currently reads 61.78, pointing to growing bullish momentum without yet entering overbought territory.

Traders are eyeing a move toward the next resistance levels at $1.08544 and $1.08849, with extended upside potential toward $1.09177.

The setup favors a continuation higher, particularly if EUR/USD holds above the $1.08120 pivot. A failure to maintain this breakout level could lead to a retest of $1.07585 and, if breached, expose support at $1.07214 and $1.06780.

For now, however, the price structure favors buying dips, with the breakout confirmed by both price action and momentum.

A favorable risk-reward setup is evident for long positions entered above $1.08120, targeting $1.08849, with a stop loss below $1.07585.

The shift in structure and the break above the channel suggest further gains are likely, barring any major macro-driven dollar strength.

EUR/USD has confirmed a bullish breakout above $1.08120. The trend favors upside toward $1.08849, while $1.07585 remains key support to protect the bias.

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