EUR/USD Price Analysis – March 05, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair extended its upward momentum on Wednesday, reaching near 1.0720, the highest level seen this year.
However, the shared currency strengthened as investors moved away from the US Dollar (USD) amid growing concerns over the United States (US) economic outlook.
Meanwhile, the US Dollar Index (DXY), which measures the Greenback’s value against a basket of six major currencies, slipped to a three-month low of 105.15.
EUR/USD Strengthens Amid Weak US Dollar and Rate Cut Expectations
On the US front, the broad-based US dollar came under pressure as market participants reassessed their expectations regarding US economic growth.
Investors are increasingly worried that former President Donald Trump’s proposed tariff policies could slow down economic expansion rather than fuel inflation and growth, as previously expected.
Adding to the bearish sentiment, Citi analysts forecasted a 0.1% decline in Q1 real Gross Domestic Product (GDP) and projected that the Federal Reserve (Fed) might resume its rate-cut cycle in May, after pausing in December. This, in turn, has pressured the US dollar, making the Euro more attractive.
German Debt Reforms and ECB Policy Outlook Support Euro
On the flip side, the Euro found support from expectations of fiscal expansion in Germany. Frederich Merz, the likely next German chancellor, along with the Social Democratic Party (SPD), has agreed on a 500 billion Euro infrastructure fund and a relaxation of borrowing limits.
These changes could boost economic growth in the Eurozone and push inflation higher, helping the Euro stay strong.
However, the upcoming European Central Bank (ECB) monetary policy meeting remains a key event for EUR/USD traders. Notably, the ECB is widely expected to cut its Deposit Facility Rate by 25 basis points (bps) for the fifth consecutive time.
Meanwhile, ECB President Christine Lagarde is expected to clarify the bank’s monetary policy path. Investors will closely watch her remarks on the impact of Trump’s tariffs and Germany’s fiscal policies on the Eurozone economy.
Trade Tensions and US Economic Data to Impact EUR/USD
On the geopolitical front, the US has already imposed 25% tariffs on imports from Canada and Mexico and 10% on Chinese goods, with additional reciprocal tariffs set to take effect from April 2.
This poses a risk to the Euro, as Germany, a key economy in the Eurozone, is a major car exporter to the US. Trump’s plan to raise tariffs on foreign automobiles from 2.5% to 25% could hurt German automakers, impacting exports and economic growth. If trade tensions escalate, market uncertainty may weigh on the Euro, affecting the EUR/USD pair.
Looking ahead, investors will focus on key US economic data, including the ADP Employment Change and ISM Services data for February, set to be released in the North American session.
These figures could shape market expectations for the Fed’s monetary policy, ultimately influencing EUR/USD’s next move.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.06248, struggling to hold above key support levels as the U.S. dollar retains strength. The pivot point at $1.06351 is a crucial threshold, with the pair teetering just below it. The 50-day EMA at $1.04784 signals a bearish bias, suggesting further downside potential if sellers remain in control.
A break below $1.06344 could accelerate selling pressure, with immediate support at $1.05614 acting as the next key level. If the bearish momentum continues, EUR/USD could decline further toward $1.04962, with an extended downside target at $1.04448, marking a multi-week low.
On the upside, resistance remains firm at $1.06990, with a break above this level required for any meaningful recovery. If the pair manages to push higher, the next upside hurdles are $1.07453 and $1.08038, where sellers may re-emerge. However, given the current bearish sentiment, a sustained move above $1.06837 is required to shift momentum.
The technical landscape remains bearish, as long as EUR/USD trades below the pivot point at $1.06351. A confirmed break below $1.05614 could trigger further declines, while a push above $1.06990 would be needed to negate the bearish outlook.
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GBP/USD Price Analysis – March 03, 2025
Daily Price Outlook
During the European trading session, the GBP/USD currency pair started the week on a positive note, trading above the 1.2630 level.
However, the Pound gained momentum mainly due to optimism surrounding a potential peace truce between Russia and Ukraine, which helped reduce the risk premium on the US Dollar.
In addition to the geopolitical news, expectations that the Bank of England (BoE) will adopt a moderate approach to policy easing have further strengthened the Pound.
The possibility of a healthy trade deal between the US and the UK also played a role in boosting confidence in the British economy. As a result, the GBP rose against most of its major peers, except the Euro, as investors remain hopeful about these positive developments.
GBP Strengthens Amid Peace Truce Hopes and BoE's Cautious Monetary Policy
On the GBP front, the Pound gained traction mainly due to hopes for a potential peace truce between Russia and Ukraine, which has lowered the risk attached to the US Dollar.
Moreover, expectations that the Bank of England (BoE) will take a moderate approach to easing its policies and a likely trade deal between the US and UK have kept the British currency in a favorable position.
On Friday, BoE Deputy Governor Dave Ramsden emphasized the need for a "careful and gradual" approach to expanding monetary policy, citing uncertainties in the labor market and global trade.
Ramsden also pointed out that inflation pressures remain high due to strong wage growth, and he no longer sees the risks of hitting the 2% inflation target as being to the downside.
Despite this, traders are already pricing in two interest rate cuts this year, which has influenced market sentiment.
Hence, the positive outlook for the Pound, fueled by optimism around the peace truce and BoE's cautious stance, has supported the GBP/USD pair, pushing it higher against the US Dollar.
GBP/USD Rebounds Amid Peace Truce Hopes, but US Dollar Faces Tariff Uncertainty
On the US front, the broad-based US Dollar lost its traction and dropped in the wake of optimism surrounding a potential peace plan between Russia and Ukraine.
As a result, the GBP/USD pair rebounded to near 1.2639 on Monday. Notably, the hopes of a peace truce contributed to easing geopolitical tensions, reducing the safe-haven appeal of the US Dollar.
It should be noted that UK Prime Minister Keir Starmer announced over the weekend that European leaders, along with Ukrainian President Volodymyr Zelenskyy, have agreed to present a peace plan to the United States.
This meeting has raised hopes for a resolution to the war. As a result of these positive developments, the demand for the US Dollar as a safe-haven asset has decreased, leading to a decline in its value.
Moving ahead, investors should remain cautious about betting too much against the US Dollar because of ongoing tariff threats. US President Donald Trump plans to impose tariffs on Canada, Mexico, and China for not doing enough to stop fentanyl from entering the US.
Although there’s some room for negotiation on the tariffs, this could create market uncertainty and may support the US Dollar in the short term.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.26002, down 0.01%, as the British pound struggles to hold ground against a resilient U.S. dollar. With the pair positioned just below the pivot point of $1.26228, the short-term outlook leans slightly bearish.
Immediate resistance is seen at $1.26896, followed by $1.27505 and $1.28060. A break above $1.26228 would shift sentiment bullish, with the 50-day EMA at $1.26304 acting as a key hurdle for buyers. However, sustained weakness below this level may reinforce further downside.
On the support side, $1.25586 serves as the first line of defense, with $1.25087 and $1.24528 providing deeper support zones. If the pair breaks below $1.25586, the decline could accelerate, potentially reaching the $1.25087 level, which aligns with previous consolidation areas.
From a technical perspective, the 50-day EMA at $1.26304 is acting as dynamic resistance. A sell entry below $1.26217 is favored, with a take-profit target at $1.25363 and a stop-loss at $1.26894 to cap risk.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD remains bullish above $1.03963, with key resistance at $1.04518.
- 50-day EMA at $1.04552 is a key hurdle for further upside momentum.
- Buy entry above $1.03958, target $1.04523, stop-loss at $1.03575.
The EUR/USD pair is trading at $1.04126, showing minor losses as the dollar holds firm amid economic uncertainty. The pair remains below the pivot point at $1.03963, signaling a neutral to slightly bullish bias in the short term.
Immediate resistance is seen at $1.04518, followed by $1.04837 and $1.05279. A break above $1.04518 could strengthen bullish momentum, with traders eyeing the 50-day EMA at $1.04552 as a key level for further gains. However, failure to clear this resistance may trigger renewed selling pressure.
On the downside, immediate support is at $1.03451, with stronger levels at $1.03163 and $1.02824. If the pair falls below $1.03451, sellers could push the price lower, testing the $1.03163 level, which aligns with previous market structure.
Technically, the 50-day EMA at $1.04552 remains a critical barrier for the bulls. A buy entry above $1.03958 could target $1.04523, with a stop-loss at $1.03575 to manage downside risks. A breakout above $1.04518 would strengthen the case for further gains, while a move below $1.03451 could accelerate selling pressure.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.03958
Take Profit – 1.04523
Stop Loss – 1.03575
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$565/ -$383
Profit & Loss Per Mini Lot = +$56/ -$38
EUR/USD Price Analysis – March 03, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair broke its three-day losing streak and edged higher around 1.0440 level.
However, the recovery in the Euro was driven by a weaker US dollar following the release of January’s Personal Consumption Expenditures (PCE) inflation data, which met expectations and alleviated concerns about unexpected inflation spikes in the United States. On the other hand, the Euro gained strength, supported by stronger-than-expected Eurozone inflation data.
Eurozone Inflation Data Supports EUR, But ECB's Easing Policy Limits Strength
On the data front, the Harmonized Index of Consumer Prices (HICP) rose 2.4% year-on-year (YoY) in February, a small decrease from January’s 2.5%. This was still a bit higher than the 2.3% that markets had expected. The core HICP, which excludes food and energy prices, increased by 2.6% YoY, matching market expectations but slightly down from 2.7% in January.
On a monthly basis, the HICP climbed by 0.5% in February, a bounce back from the 0.3% drop seen in January. Similarly, core HICP inflation grew 0.6% month-over-month, reversing January’s 0.9% decline. This increase in monthly inflation suggests that price pressures in the Eurozone are still present, even if overall inflation is cooling slightly.
However, the European Central Bank (ECB) has a target inflation rate of 2.0%, and this inflation data could impact future decisions on interest rates. Although the inflation numbers were higher than expected, the ECB is still likely to continue its policy of easing in its upcoming meeting.
US Dollar Weakens Despite Rising Yields and Trade Tensions, Boosting EUR/USD Outlook
On the US front, the broad-based US dollar has weakened after three consecutive days of gains, trading around 107.30 on the US Dollar Index (DXY).
However, the downside for the Greenback could be limited as US Treasury yields are improving, with the 2-year yield at 4.02% and the 10-year yield at 4.24%. These rising yields suggest that the USD could still find support in the near term.
On the data front, the release of the January Personal Consumption Expenditures (PCE) inflation report provided a boost to the EUR/USD pair.
The data came in line with expectations, easing concerns over unexpected inflation spikes in the US. The headline PCE remained steady at 0.3% month-over-month, while the core PCE rose slightly to 0.3%, up from 0.2% in December.
On an annual basis, the headline PCE was 2.6%, just above forecasts, but unchanged from December's reading. Overall, the report helped ease inflation worries, which in turn supported the EUR/USD recovery.
Looking forward, the rising US-China trade tensions could offer support to the USD, as investors often turn to the Greenback during times of uncertainty.
US President Trump announced new tariffs on Chinese imports, starting this Tuesday, and also mentioned 25% tariffs on goods from Canada and Mexico set to take effect on March 4. This could cap EUR/USD gains as the USD strengthens due to safe-haven flows amid escalating trade tensions. (edited)
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.04126, showing minor losses as the dollar holds firm amid economic uncertainty. The pair remains below the pivot point at $1.03963, signaling a neutral to slightly bullish bias in the short term.
Immediate resistance is seen at $1.04518, followed by $1.04837 and $1.05279. A break above $1.04518 could strengthen bullish momentum, with traders eyeing the 50-day EMA at $1.04552 as a key level for further gains. However, failure to clear this resistance may trigger renewed selling pressure.
On the downside, immediate support is at $1.03451, with stronger levels at $1.03163 and $1.02824. If the pair falls below $1.03451, sellers could push the price lower, testing the $1.03163 level, which aligns with previous market structure.
Technically, the 50-day EMA at $1.04552 remains a critical barrier for the bulls. A buy entry above $1.03958 could target $1.04523, with a stop-loss at $1.03575 to manage downside risks. A breakout above $1.04518 would strengthen the case for further gains, while a move below $1.03451 could accelerate selling pressure.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Momentum: EUR/USD remains bearish below the 50 EMA at $1.04681 and the Pivot Point at $1.03805.
- Support Levels: Key supports at $1.03556, $1.03326, and $1.03099.
- Resistance Levels: Immediate resistance at $1.04063, followed by $1.04223 and $1.04476.
EUR/USD is trading at $1.03842, down 0.02%, reflecting a cautious market sentiment as it hovers slightly above the Pivot Point at $1.03805.
The currency pair faces immediate resistance at $1.04063, followed by stronger barriers at $1.04223 and $1.04476. These resistance levels coincide with the 50-day Exponential Moving Average (EMA) at $1.04681, suggesting continued selling pressure unless the pair breaks above this level.
On the downside, immediate support is observed at $1.03556, with further cushions at $1.03326 and $1.03099.
A break below $1.03556 could accelerate the bearish trend, pushing EUR/USD towards the lower support zones.
Conversely, a sustained move above $1.03805 could challenge the $1.04063 resistance level, potentially shifting momentum towards the bulls.
The technical setup indicates a bearish bias as long as EUR/USD trades below the 50 EMA and the Pivot Point. The 4-hour chart shows a descending trendline, reinforcing selling interest. If the price fails to reclaim the $1.03805 level, it is likely to face continued downward pressure.
For now, the recommended strategy is to Buy Above $1.03810, with a Take Profit at $1.04223 and a Stop Loss at $1.03553.
Traders should watch for price action around $1.03805, as a break above this level could invalidate the bearish outlook and trigger a short-term recovery.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.03810
Take Profit – 1.04223
Stop Loss – 1.03553
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$426/ -$257
Profit & Loss Per Mini Lot = +$42/ -$25
EUR/USD Price Analysis – Feb 28, 2025
Daily Price Outlook
During the early European session on Friday, EUR/USD remained under selling pressure, trading near 1.0390. Despite upbeat German Retail Sales data, the Euro failed to gain support and weakened against the US Dollar.
However, the pair’s decline was mainly driven by a stronger US dollar and ongoing risk-off sentiment in the market.
Stronger US Dollar and Risk-Off Market Sentiment Weigh on EUR/USD
On the US front, the broad-based US Dollar remains strong amid growing concerns over global trade tensions and previously released upbeat US data.
However, Former US President Donald Trump announced on Thursday that 25% tariffs on imports from Canada and Mexico will take effect on March 4. In the meantime, the goods from China will face an additional 10% tariff.
This aggressive stance on tariffs has fueled uncertainty, putting downward pressure on risk-sensitive currencies like the Euro.
On the flip side, the Federal Reserve’s cautious stance on interest rates supports the Greenback. Cleveland Fed President Beth Hammack and Atlanta Fed President Raphael Bostic have both indicated that the US central bank is likely to keep rates on hold for now.
Investors are closely watching the upcoming US Personal Consumption Expenditures (PCE) Price Index report, which could impact Fed policy expectations. Currently, markets anticipate a 68% chance of a rate cut in June, but uncertainty remains high.
EUR Struggles Despite Strong German Retail Sales Amid US Tariff Threats and Fed Caution
On the economic data front, Germany’s Retail Sales data showed a 0.2% month-on-month (MoM) rebound in January, beating the market expectation of 0%. On an annual basis, sales increased by 2.9%, up from 1.8% in December.
However, this positive data failed to provide support for the Euro, as broader market sentiment and USD strength overshadowed the upbeat figures.
Meanwhile, the European economy remains vulnerable amid concerns over US-EU trade relations. Trump’s recent comments about imposing a 25% tariff on European goods add to the pressure on the shared currency.
Therefore, the ongoing geopolitical uncertainties and risk-averse mood in financial markets are limiting the Euro’s possibility for recovery against the USD.
Investors now turn their attention to the US PCE inflation data set to be released later on Friday. Any signs of cooling inflation could weaken the USD, providing some relief for EUR/USD.
However, if inflation remains stubbornly high, it may reinforce the Fed’s cautious stance, keeping the Greenback strong.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.03842, down 0.02%, reflecting a cautious market sentiment as it hovers slightly above the Pivot Point at $1.03805.
The currency pair faces immediate resistance at $1.04063, followed by stronger barriers at $1.04223 and $1.04476. These resistance levels coincide with the 50-day Exponential Moving Average (EMA) at $1.04681, suggesting continued selling pressure unless the pair breaks above this level.
On the downside, immediate support is observed at $1.03556, with further cushions at $1.03326 and $1.03099.
A break below $1.03556 could accelerate the bearish trend, pushing EUR/USD towards the lower support zones.
Conversely, a sustained move above $1.03805 could challenge the $1.04063 resistance level, potentially shifting momentum towards the bulls.
The technical setup indicates a bearish bias as long as EUR/USD trades below the 50 EMA and the Pivot Point. The 4-hour chart shows a descending trendline, reinforcing selling interest. If the price fails to reclaim the $1.03805 level, it is likely to face continued downward pressure.
For now, the recommended strategy is to Buy Above $1.03810, with a Take Profit at $1.04223 and a Stop Loss at $1.03553.
Traders should watch for price action around $1.03805, as a break above this level could invalidate the bearish outlook and trigger a short-term recovery.
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EUR/USD Price Analysis – Feb 26, 2025
Daily Price Outlook
EUR/USD continues to face selling pressure above 1.0490 in Wednesday’s European session. However, the currency pair is falling due to a strong recovery in the US Dollar (USD).
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rebounded sharply to near 106.50 after dipping to an 11-week low of 106.10 earlier in the day.
US Dollar Gains on Rising Treasury Yields and PCE Inflation Data
On the US front, the broad-based US dollar recovered due to the strong recovery in US bond yields, which had been declining for almost a month. The 10-year US Treasury yields surged to near 4.33% after hitting a fresh 13-week low of around 4.28% earlier in the day.
The House approved Donald Trump's $4.5 trillion tax cut plan, causing traders to sell US government bonds. They expect lower taxes to boost spending, leading to higher inflation.
This could force the Federal Reserve to keep interest rates high for longer, strengthening the US dollar and putting pressure on the EUR/USD pair.
Investors await the US Personal Consumption Expenditures Price Index (PCE) data for January, scheduled for release on Friday, to gain fresh insights into inflation trends.
Meanwhile, the core PCE inflation data, the Fed’s preferred measure as it excludes volatile food and energy prices, is estimated to have slowed to 2.6% year-over-year from 2.8% in December. Softer inflation data could weigh on expectations that the Fed will delay rate cuts.
Euro Struggles Amid ECB Policy Outlook
On the other hand, the EUR/USD is under pressure as investors favor the US Dollar over the Euro (EUR). However, the shared currency is outperforming as traders shift focus to the upcoming European Central Bank (ECB) policy meeting next week.
It should be noted that the ECB is widely expected to cut its Deposit Facility rate by 25 basis points (bps) to 2.5%. Investors will closely monitor the ECB’s monetary policy guidance.
Several ECB officials have indicated that the central bank should continue reducing interest rates, given expectations that inflation will sustainably return to the 2% target.
Moreover, the Soft Eurozone Q4 Negotiated Wage Rate data, a key wage growth measure, has reinforced expectations of ECB rate cuts. On Tuesday, the ECB reported that the wage growth measure increased at a slower pace of 4.12%, compared to a 5.43% rise in the previous quarter.
However, ECB board member Isabel Schnabel criticized dovish bets, arguing that Eurozone economic weakness is “not due to overly high borrowing costs” but rather to “structural factors.” She suggested that the current 2.75% rate may no longer be restrictive for the eurozone economy.
Looking ahead, investors will monitor the German flash Harmonized Index of Consumer Prices (HICP) data for February, set for release on Friday, for further cues on inflation and ECB policy direction.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04972, down 0.01%, reflecting cautious sentiment as it hovers just above the pivot point at $1.04780. The pair is trading above the 50 EMA at $1.04709, signaling short-term bullish momentum.
If the price holds above this pivot, the next target is immediate resistance at $1.05290. A break above this level could push prices towards $1.05673, with a more ambitious move towards $1.06076 if buying pressure continues.
On the downside, if EUR/USD breaks below the pivot at $1.04780, it would shift sentiment to bearish, targeting immediate support at $1.04505.
A further decline could see the pair testing $1.04075, with a deeper drop towards $1.03556 if selling intensifies. The 50 EMA at $1.04709 acts as dynamic support, and a break below this level would confirm a bearish reversal.
The technical outlook suggests a cautious buy above the pivot at $1.04785, targeting $1.05475 with a stop loss at $1.04402.
This setup aligns with the short-term bullish bias while maintaining a favorable risk-reward ratio. Traders should watch for volume confirmation and price action around the $1.05290 resistance to validate the bullish momentum.
Conversely, a break below $1.04780 would invalidate the bullish setup and shift sentiment to bearish, likely driving prices towards $1.04505 and beyond.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bullish Above $1.04780: Holding above the pivot targets $1.05290 and $1.05673, signaling continued upward momentum.
- Bearish Below $1.04780: A breakdown could see declines towards $1.04505 and $1.04075, signaling a potential bearish reversal.
- Technical Setup: 50 EMA at $1.04709 acts as dynamic support, reinforcing short-term bullish sentiment.
EUR/USD is trading at $1.04972, down 0.01%, reflecting cautious sentiment as it hovers just above the pivot point at $1.04780. The pair is trading above the 50 EMA at $1.04709, signaling short-term bullish momentum.
If the price holds above this pivot, the next target is immediate resistance at $1.05290. A break above this level could push prices towards $1.05673, with a more ambitious move towards $1.06076 if buying pressure continues.
On the downside, if EUR/USD breaks below the pivot at $1.04780, it would shift sentiment to bearish, targeting immediate support at $1.04505.
A further decline could see the pair testing $1.04075, with a deeper drop towards $1.03556 if selling intensifies. The 50 EMA at $1.04709 acts as dynamic support, and a break below this level would confirm a bearish reversal.
The technical outlook suggests a cautious buy above the pivot at $1.04785, targeting $1.05475 with a stop loss at $1.04402.
This setup aligns with the short-term bullish bias while maintaining a favorable risk-reward ratio. Traders should watch for volume confirmation and price action around the $1.05290 resistance to validate the bullish momentum.
Conversely, a break below $1.04780 would invalidate the bullish setup and shift sentiment to bearish, likely driving prices towards $1.04505 and beyond.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.04785
Take Profit – 1.05475
Stop Loss – 1.04402
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$690/ -$383
Profit & Loss Per Mini Lot = +$69/ -$38
EUR/USD Price Analysis – Feb 24, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward trend and stayed strong around the 1.0471 level, reaching an intra-day high of 1.0528. This shows that the Euro was performing well earlier in the day, attracting buyers. However, as the session progressed, the pair lost some of its gains due to weakness in the Euro.
The Euro weakened following the German federal election results, where no single party secured a clear majority. This political uncertainty added pressure to the Euro, as it could slow down economic growth in Germany, which is the largest economy in the Eurozone. Investors became cautious, leading to a partial pullback in the EUR/USD pair.
Despite the Euro's weakness, the downside in the EUR/USD pair remained limited due to a weaker US Dollar. Investors overlooked disappointing US flash S&P Global PMI data for February, keeping the dollar under pressure. As a result, the EUR/USD pair maintained some of its earlier gains, preventing a sharper decline.
US Dollar Weakens on Soft PMI Data and Fed Rate Cut Bets, but Trade Risks Persist
On the US front, the broad-based US Dollar lost momentum as weak economic data raised expectations of Federal Reserve (Fed) rate cuts.
The latest S&P Global PMI report showed that private business activity in the US grew at a much slower pace in February.
The Composite PMI, which tracks both manufacturing and services, dropped to 50.4, the lowest level since September 2023. The decline was mainly driven by weaker services sector activity, which fell to 49.7 from 52.9 in January.
This drop was unexpected and was linked to political uncertainty over federal spending cuts and their potential impact on economic growth and inflation. However, the manufacturing sector performed better, with the Manufacturing PMI rising to 51.6, exceeding expectations.
The weak PMI data strengthened market bets that the Fed will cut interest rates in June, pushing the probability to 63.5% from 50% last week.
However, some support for the Dollar came from concerns over a global slowdown due to former US President Donald Trump's tariff threats. He has warned of imposing tariffs on products like lumber, semiconductors, pharmaceuticals, and automobiles, which could impact global trade.
Therefore, the weak US PMI data and rising Fed rate cut bets support the EUR/USD pair by weakening the Dollar. However, Trump's tariff threats limit gains, creating mixed sentiment and potential volatility in the pair.
EUR Weakens Amid German Election Uncertainty and ECB Rate Cut Signals
On the EUR front, the shared currency weakened following the German federal election, as no single party secured a clear majority. Friedrich Merz, leader of the Christian Democratic Union (CDU), is set to become Germany’s Chancellor but faces tough negotiations to form a coalition government, likely with the Social Democratic Party (SPD).
Analysts at ING believe the new government may only bring short-term economic benefits, such as minor tax cuts and small reforms. Adding to the Euro's weakness, the European Central Bank (ECB) remains focused on policy easing.
ECB policymaker François Villeroy de Galhau recently stated that the central bank could cut its deposit rate to 2% by summer, reinforcing expectations of lower interest rates.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04827, showing slight downward movement but maintaining support above the pivot point at $1.04553. This level is crucial as it aligns closely with the 50 EMA at $1.04518, providing a key support zone.
The technical outlook remains cautiously bullish above this level. If EUR/USD can break above the immediate resistance at $1.05290, it may target the next resistance at $1.05673, with a potential extension to $1.06076.
However, if prices fall below the pivot point, the first support is at $1.04075, followed by $1.03556 and $1.03157. A break below the 50 EMA could signal a bearish shift, increasing selling pressure. The overall outlook remains bullish as long as EUR/USD trades above $1.04553 and the 50 EMA, but a breakdown below these levels could signal a bearish reversal.
Traders should watch for a decisive breakout above $1.05290 for bullish continuation, while a drop below $1.04553 may indicate a bearish pullback.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Cautious Bullish Momentum: EUR/USD remains cautiously bullish above the pivot point at $1.04553 and the 50 EMA at $1.04518.
- Critical Resistance Levels: Watch for a breakout above $1.05290 to target $1.05673 and $1.06076.
- Support Levels: Key support at $1.04075 and $1.03556; a break below could signal a bearish reversal.
EUR/USD is trading at $1.04827, showing slight downward movement but maintaining support above the pivot point at $1.04553. This level is crucial as it aligns closely with the 50 EMA at $1.04518, providing a key support zone.
The technical outlook remains cautiously bullish above this level. If EUR/USD can break above the immediate resistance at $1.05290, it may target the next resistance at $1.05673, with a potential extension to $1.06076.
However, if prices fall below the pivot point, the first support is at $1.04075, followed by $1.03556 and $1.03157. A break below the 50 EMA could signal a bearish shift, increasing selling pressure. The overall outlook remains bullish as long as EUR/USD trades above $1.04553 and the 50 EMA, but a breakdown below these levels could signal a bearish reversal.
Traders should watch for a decisive breakout above $1.05290 for bullish continuation, while a drop below $1.04553 may indicate a bearish pullback.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.04549
Take Profit – 1.05296
Stop Loss – 1.04153
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$747/ -$396
Profit & Loss Per Mini Lot = +$74/ -$39