- The pair drops to 1.1280/70 band, fresh session lows.
- Threats of US tariffs on EU cars weigh on spot.
- Economic Sentiment in Germany, EMU remains depressed.
The selling pressure around the shared currency has now intensified and is forcing EUR/USD to recede to the 1.1280/70 band, or fresh weekly lows.
EUR/USD weaker on tariffs rumours
The pair comes under renewed and strong selling pressure following a sharp rebound in the demand for the greenback, which lifted the US Dollar Index (DXY) back above the key 97.00 the figure.
In fact, the Trump administration could impose tariffs on US imports of EU cars and auto-parts, mostly affecting – at least initially- German carmakers. In fact, according to the think tank IFO, a 25% tariffs could trigger around 50% drop in German exports to the US.
Earlier in the session, Economic Sentiment in Germany and the broader euro area improved a tad for the current month as per the latest ZEW Survey, although they still remain in depressed levels.
What to look for around EUR
US-China trade talks will be in centre stage this week and are expected to drive the sentiment in the risk-associated complex. Following recent progress in earlier talks, market participants are now looking at the possibility that both parties could clinch a deal sooner than later. Still on the trade front, EUR is expected to face renewed winds from the likeliness of tariffs on US imports of EU cars. On another direction, EUR should closely follow comments from ECB members regarding the ongoing slowdown in the euro bloc and potential guidance from the ECB in the next months, at a time when speculations that the central bank could refrain from acting on rates this year remain on the rise.
EUR/USD levels to watch
At the moment, the pair is losing 0.26% at 1.1279 and a break below 1.1234 (2019 low Feb.15) would target 1.1215 (2018 low Nov.12) en route to 1.1118 (monthly low Jun.20 2017). On the upside, the next hurdle is located at 1.1339 (high Feb.18) seconded by 1.1356 (23.6% Fibo of the September-November drop) and then 1.1399 (100-day SMA).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.