EUR/USD Price Forecast: Buyers retain control in the ECB’s aftermath

EUR/USD Current price: 1.0819

• The European Central Bank cut interest rates by 25 basis points as expected.
• United States employment-related figures came in better than anticipated.
• The EUR/USD pair retains its bullish tone despite overbought conditions.

The EUR/USD pair peaked at 1.0822 early on Thursday, as the US Dollar (USD) remained heavily pressured by trade-war-related headlines, while an improved market mood further undermined demand for the safe-haven currency.

United States (US) President Donald Trump finally granted a one-month exemption for vehicles coming through the Canada-US-Mexico Agreement on trade after the three major automakers, Stellantis, Ford and General Motors, asked for help. However, White House Press Secretary Karoline Leavitt clarified that reciprocal tariffs will still go into effect on April 2.

Meanwhile, the European Central Bank (ECB) announced its decision on monetary policy. As widely anticipated, officials trimmed interest rates by 25 basis points (bps). The news provided a limited boost to the Euro (EUR) ahead of President Christine Lagarde’s press conference.

Across the pond, the US published Initial Jobless Claims for the week ended February 28, which improved to 221K, down from the 242K posted in the previous week. Unit Labor Cost in Q4 declined to 2.2% from the previous 3%, while Nonfarm Productivity improved in the same period from 1.2% to 1.5%. Finally, the Goods and Services Trade Balance posted a wider-than-anticipated deficit of $ 131.4 billion.

EUR/USD short-term technical outlook

EUR/USD peaked at 1.0845 after the ECB’s announcement, holding above the 1.0800 mark afterwards. The pair is overbought yet there are no technical signs of a potential reversal. The pair develops well above all its moving averages, with the 20 Simple Moving Average (SMA) gaining upward traction yet below the 100 and 200 SMAs. Technical indicators, in the meantime, turned flat within overbought levels.

In the near term, and according to the 4-hour chart, technical indicators resumed their advance at extreme levels, limiting the downside for EUR/USD. At the same time, the 20 SMA heads north almost vertically well above the longer ones and over 200 pips below the current level, which is in line with prevalent buying interest.

Support levels: 1.0780 1.0735 1.0680

Resistance levels: 1.0845 1.0890 1.0925