EUR/USD Price Forecast: Fears push investors into the US Dollar

EUR/USD Current price: 1.0419

• Renewed concerns about US tariffs undermined the market’s mood.
• Investors await the announcements of the Federal Reserve and the European Central Bank.
• EUR/USD nears the 1.0400 mark with a solid near-term bearish tone.

The EUR/USD pair is in retreat mode on Tuesday, easing from the weekly peak in the 1.0530 region over 100 pips and heading into the American session, opening trading a handful of pips above the 1.0400 mark. The US Dollar (USD) surged on renewed tariff-related concerns.

Treasury Secretary Scott Bessent pushed for new universal tariffs on US imports to start at 2.5% and rise gradually, the Financial Times reported on Monday. However, President Trump responded that he wanted considerably higher, uniform tariffs. As a result, financial markets turned risk averse, with investors also concerned about overvalued AI shares.

Data-wise, the Eurozone had little to offer, with the United States (US) macroeconomic calendar including December Durable Goods Orders. Still, the focus remains on Trump’s tariffs and the upcoming central banks’ meetings. The Federal Reserve (Fed) will announce its decision on monetary policy on Wednesday, while the European Central Bank (ECB) will do so on Thursday.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows it could extend its slide, but the bearish case is still uncertain. The pair develops well above a flat 20 Simple Moving Average (SMA), providing support at around 1.0355. The 100 SMA, in the meantime, retains its bearish slope well above the current level. Finally, technical indicators head south, although still well above their midlines, not enough to anticipate a firmer slide.

However, the near-term picture is bearish. The 4-hour chart shows the pair broke below a now mildly bullish 20 SMA while approaching a bearish 200 SMA. Meanwhile, technical indicators head firmly lower within negative levels, in line with another leg lower, particularly if the 1.0400 threshold gives up.

Support levels: 1.0400 1.0355 1.0310

Resistance levels: 1.0440 1.0485 1.0520