EUR/USD Forecast: Euro holds above key support level but remains fragile
- EUR/USD holds comfortably above 1.0800 in the European morning on Monday.
- The US Dollar stays under pressure following latest tariff headlines.
- The technical outlook points to a bullish tilt in the near term.
EUR/USD registered gain on Thursday and Friday to end the previous week virtually unchanged. The pair holds steady above 1.0800 in the European session on Monday. Although the pair's technical outlook points to a bullish bias, the Euro could have a difficult time gathering strength in the risk-averse market atmosphere.
The selling pressure surrounding the US Dollar (USD) helps EUR/USD hold its ground to start the new week as investors grow increasingly concerned about the potential negative impact of tariffs on the US economic outlook.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.21% | -0.51% | 0.11% | 0.04% | 0.03% | -0.07% | |
| EUR | 0.06% | -0.05% | -0.42% | 0.21% | 0.18% | 0.13% | 0.04% | |
| GBP | 0.21% | 0.05% | -0.39% | 0.31% | 0.23% | 0.21% | 0.14% | |
| JPY | 0.51% | 0.42% | 0.39% | 0.63% | 0.61% | 0.59% | 0.37% | |
| CAD | -0.11% | -0.21% | -0.31% | -0.63% | -0.04% | -0.08% | -0.17% | |
| AUD | -0.04% | -0.18% | -0.23% | -0.61% | 0.04% | -0.03% | -0.13% | |
| NZD | -0.03% | -0.13% | -0.21% | -0.59% | 0.08% | 0.03% | -0.10% | |
| CHF | 0.07% | -0.04% | -0.14% | -0.37% | 0.17% | 0.13% | 0.10% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Over the weekend, the Wall Street Journal reported that US President Donald Trump's advisers are considering imposing global tariffs of up to 20% on all imports into the US. Additionally, Trump said on Sunday that if he feels that Moscow is trying to block his attempts to end the war in Ukraine, he would impose secondary tariffs of 25%-50% on buyers of Russian oil.
Meanwhile, European Central Bank (ECB) President Christina Lagarde said on Monday that Trump's tariff policy would lower Eurozone growth by at least 0.3%. According to Reuters, Goldman Sachs announced earlier in the day that they are now expecting the ECB to deliver 25 basis points (bps) rate cuts in April, June and July.
The economic calendar will feature preliminary March Consumer Price Index (CPI) data from Germany on Monday. Investors could ignore this report and refrain from taking large positions before the Trump administration shares the details of the new tariff agenda on Wednesday.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart rises toward 60 early Monday, reflecting a bullish stance. Additionally, EUR/USD continues to pull away from the 200-day Simple Moving Average (SMA) after testing this level twice in the previous week.
On the upside, 1.0850 (static level, 100-period SMA) aligns as first resistance before 1.0900 (static level, round level) and 1.0950 (static level). Looking south, interim support could be spotted at 1.0830 (20-day SMA) before 1.0800 (static level, round level) and 1.0730 (200-day SMA).
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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.
