EUR/USD Forecast: Euro bulls hesitate as markets navigate through tariff uncertainty
- EUR/USD trades below 1.1800 in the European morning on Tuesday.
- The technical outlook highlights a lack of buyer interest in the near term.
- The US economic calendar will feature mid-tier data releases.
EUR/USD lost its traction in the second half of the day on Monday and closed the day virtually unchanged after starting the week with a bullish gap. Early Tuesday, the pair continues to edge lower and trades below 1.1800.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.07% | 0.39% | 0.02% | -0.05% | -0.05% | 0.27% | |
| EUR | -0.14% | -0.07% | 0.24% | -0.12% | -0.19% | -0.19% | 0.13% | |
| GBP | -0.07% | 0.07% | 0.31% | -0.05% | -0.12% | -0.12% | 0.21% | |
| JPY | -0.39% | -0.24% | -0.31% | -0.37% | -0.43% | -0.44% | -0.10% | |
| CAD | -0.02% | 0.12% | 0.05% | 0.37% | -0.06% | -0.07% | 0.26% | |
| AUD | 0.05% | 0.19% | 0.12% | 0.43% | 0.06% | -0.00% | 0.33% | |
| NZD | 0.05% | 0.19% | 0.12% | 0.44% | 0.07% | 0.00% | 0.33% | |
| CHF | -0.27% | -0.13% | -0.21% | 0.10% | -0.26% | -0.33% | -0.33% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The negative impact of the US traiff uncertainty on the US Dollar (USD) faded away in the American session on Monday. The bearish opening in Wall Street, followed by another bout of heavy selloff, allowed the USD to benefit from safe-haven flows and caused EUR/USD to turn south.
Meanwhile, the European Parliament decided on Monday to postpone a vote, which was originally planned for Tuesday, on the EU-US trade deal after US President Trump announced blanket 15% tariff in response to the US Supreme Court's ruling against existing tariffs.
The European economic calendar will not feature any high-impact data releases on Tuesday. Later in the day, the Conference Board will publish the US Consumer Confidence Index data for February and the Automatic Data Processing (ADP) will release the Employment Change 4-week Average. More importantly, several Federal Reserve (Fed) policymakers will be delivering speeches.
In case policymakers note that the tariff uncertainty will cloud the inflation outlook and cause them to adopt a more patient approach to policy-easing, the USD could stay resilient against its peers and make it difficult for EUR/USD to shake off the bearish pressure. According to the CME FedWatch Tool, markets virtually see no chance of a rate cut in March and price in about a 80% probability of one more policy hold in April.
EUR/USD Technical Analysis:
The 20-, 50-, and 100-period Simple Moving Averages (SMAs) slope downward, while the 200-period SMA inches higher. Price trades beneath all four averages, keeping sellers in control. The 20 SMA at 1.1783 serves as nearby dynamic resistance. The Relative Strength Index (14) sits at 41, below its 50 midline, signaling subdued momentum.
The descending trend line from 1.2023 caps recoveries, with resistance seen at 1.1832. Measured from the 1.1590 low to the 1.2027 high, the 61.8% retracement at 1.1757 offers support. A break lower would expose the 78.6% retracement at 1.1684. A recovery through the trend-line barrier would ease bearish pressure, while a violation of Fibonacci support would extend the downside.
(The technical analysis of this story was written with the help of an AI tool.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
