EUR/USD Price Forecast: Rally waits for consolidation, looks at Powell
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UPGRADE- EUR/USD came under pressure, slipping back below the 1.1300 mark.
- The US Dollar rebounded markedly amid declining yields, steady tariff jitters.
- Economic Sentiment in Germany, EMU tumbled in April.
The Euro (EUR) failed to retest recent highs vs. the US Dollar (USD) on Tuesday, remaining vulnerable to further selling pressure as bears remained in control of the sentiment surrounding the single currency.
Indeed, after reaching yearly highs near 1.1470 last week, EUR/USD came under pressure and slid back below the 1.1300 mark on Tuesday, or two-day troughs. This price action unfolded alongside a strong bounce in the US Dollar (USD), which sent the US Dollar Index (DXY) back above the 100.00 threshold.
Additionally, decreasing US Treasury yields and a mild rebound in Germany’s 10-year bund yields came along the pair’s daily dynamics.
Trade war concerns
Trade-related uncertainties remain a key worry for the markets. President Trump intensified fears of a global trade war by imposing a sweeping 10% duty on all US trade partners effective April 5, along with additional tariffs ranging from 10% to 50% on select countries and regions.
The European Union (EU) faced a 20% tariff, and later, the White House confirmed that China would be hit with tariffs of up to 145%.
Although Trump announced a temporary 90-day pause on further tariffs for nations that refrain from retaliating—an offer that provided some relief to market participants—EU President Ursula von der Leyen warned that Brussels would not hesitate to respond if necessary.
Moreover, Trump's decision on Sunday to exclude smartphones and computers from the tariffs on China provided a slight buffer for the risk complex.
Central bank focus
Central banks remain at the forefront of market attention. The Federal Reserve (Fed) recently kept interest rates unchanged, voicing concerns that the newly imposed tariffs could reignite inflationary pressures amid slowing economic growth. Fed Chair Jerome Powell later reiterated this cautious approach while hinting at an eventual easing cycle, with traders now pricing in a full percentage point of rate cuts by the end of the year following weaker-than-expected US inflation data in March.
Across the Atlantic, the European Central Bank (ECB) is broadly expected to trim its interest rate by 25 basis points on Thursday. While the ECB predicted modest short-term growth with slight inflationary pressures through 2026, President Christine Lagarde warned that an escalating trade conflict with the US might reduce Eurozone GDP by as much as 0.5%. Some ECB officials have even suggested that more policy adjustments could be on the horizon if tensions continue to rise.
Euro bulls hold their ground
In terms of positioning, speculative net longs in the Euro have surged to two-week highs of around 60K contracts according to the latest CFTC report, while hedge funds and other commercial players have increased their net shorts to approximately 90.5K contracts—another two-week peak. Meanwhile, open interest has jumped to multi-week highs nearing 700K contracts.
And the techs?
On the technical front, upside targets point to the first hurdle at the 2025 high of 1.1473 (April 11). A strong move above this level could pave the way toward the 2022 peak of 1.1498 (February 19), just ahead of the significant 1.1500 barrier.
Conversely, support is found at the 200-day Simple Moving Average (SMA) at 1.0747, followed by the weekly low of 1.0732 (March 27) and then the 55-day SMA at 1.0695.
Momentum indicators reveal that the Relative Strength Index (RSI) receded to around 69, while an Average Directional Index (ADX) near 43 underscores a moderately strong trend that supports the prevailing bullish bias.
EUR/USD daily chart
All in all
With the US Dollar losing some of its strength, the Euro is reclaiming ground even as global trade frictions intensify. Central banks in both the US and Europe are navigating these uncertain conditions by keeping a close watch on inflation, growth signals, and the latest tariff announcements. Although EUR/USD appears poised to continue its upward trend in the near term, evolving risk sentiment and ongoing trade developments may introduce bouts of volatility along the way.
- EUR/USD came under pressure, slipping back below the 1.1300 mark.
- The US Dollar rebounded markedly amid declining yields, steady tariff jitters.
- Economic Sentiment in Germany, EMU tumbled in April.
The Euro (EUR) failed to retest recent highs vs. the US Dollar (USD) on Tuesday, remaining vulnerable to further selling pressure as bears remained in control of the sentiment surrounding the single currency.
Indeed, after reaching yearly highs near 1.1470 last week, EUR/USD came under pressure and slid back below the 1.1300 mark on Tuesday, or two-day troughs. This price action unfolded alongside a strong bounce in the US Dollar (USD), which sent the US Dollar Index (DXY) back above the 100.00 threshold.
Additionally, decreasing US Treasury yields and a mild rebound in Germany’s 10-year bund yields came along the pair’s daily dynamics.
Trade war concerns
Trade-related uncertainties remain a key worry for the markets. President Trump intensified fears of a global trade war by imposing a sweeping 10% duty on all US trade partners effective April 5, along with additional tariffs ranging from 10% to 50% on select countries and regions.
The European Union (EU) faced a 20% tariff, and later, the White House confirmed that China would be hit with tariffs of up to 145%.
Although Trump announced a temporary 90-day pause on further tariffs for nations that refrain from retaliating—an offer that provided some relief to market participants—EU President Ursula von der Leyen warned that Brussels would not hesitate to respond if necessary.
Moreover, Trump's decision on Sunday to exclude smartphones and computers from the tariffs on China provided a slight buffer for the risk complex.
Central bank focus
Central banks remain at the forefront of market attention. The Federal Reserve (Fed) recently kept interest rates unchanged, voicing concerns that the newly imposed tariffs could reignite inflationary pressures amid slowing economic growth. Fed Chair Jerome Powell later reiterated this cautious approach while hinting at an eventual easing cycle, with traders now pricing in a full percentage point of rate cuts by the end of the year following weaker-than-expected US inflation data in March.
Across the Atlantic, the European Central Bank (ECB) is broadly expected to trim its interest rate by 25 basis points on Thursday. While the ECB predicted modest short-term growth with slight inflationary pressures through 2026, President Christine Lagarde warned that an escalating trade conflict with the US might reduce Eurozone GDP by as much as 0.5%. Some ECB officials have even suggested that more policy adjustments could be on the horizon if tensions continue to rise.
Euro bulls hold their ground
In terms of positioning, speculative net longs in the Euro have surged to two-week highs of around 60K contracts according to the latest CFTC report, while hedge funds and other commercial players have increased their net shorts to approximately 90.5K contracts—another two-week peak. Meanwhile, open interest has jumped to multi-week highs nearing 700K contracts.
And the techs?
On the technical front, upside targets point to the first hurdle at the 2025 high of 1.1473 (April 11). A strong move above this level could pave the way toward the 2022 peak of 1.1498 (February 19), just ahead of the significant 1.1500 barrier.
Conversely, support is found at the 200-day Simple Moving Average (SMA) at 1.0747, followed by the weekly low of 1.0732 (March 27) and then the 55-day SMA at 1.0695.
Momentum indicators reveal that the Relative Strength Index (RSI) receded to around 69, while an Average Directional Index (ADX) near 43 underscores a moderately strong trend that supports the prevailing bullish bias.
EUR/USD daily chart
All in all
With the US Dollar losing some of its strength, the Euro is reclaiming ground even as global trade frictions intensify. Central banks in both the US and Europe are navigating these uncertain conditions by keeping a close watch on inflation, growth signals, and the latest tariff announcements. Although EUR/USD appears poised to continue its upward trend in the near term, evolving risk sentiment and ongoing trade developments may introduce bouts of volatility along the way.
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