- Fears of the repercussions of US tariffs on major trading partners continue to dominate Forex markets and all financial markets.
- In the case of the EUR/USD pair, it declined to the support level of 1.0777 before stabilizing around 1.0788 at the time of writing.
- As we predicted earlier, the stability of the EUR/USD below the 1.08 support level will increase selling pressure on the EUR/USD.
Euro Price Negatively Affected by Tariff Concerns
According to forex market trading, selling pressure on the EUR/USD has increased following reports that the US administration is proposing to impose tariffs of approximately 20% on most US imports, although a final decision has not yet been made. Investors are eagerly awaiting further details on President Trump’s reciprocal tariffs, which are set to take effect today, April 2, following last month’s imposition of tariffs on aluminium, steel, and automobiles, and increased tariffs on all Chinese goods.
Inflation Rates and the Future of ECB Policies
On another market-influencing front, economic data revealed that consumer price inflation in the Eurozone fell to 2.2% in March, the lowest since November 2024, driven primarily by a slowdown in services price growth. Core inflation fell more than expected to 2.4%, the lowest reading since January 2022. With slowing inflationary pressures and rising global trade tensions, expectations have grown that the European Central Bank (ECB) may cut interest rates by 65 basis points this year.
According to currency market trading, the euro rose 3% last month, supported by broad weakness in the US dollar amid a shift in US tariff policies and Germany’s approval of a major fiscal package.
Trading Tips:
The EUR/USD will remain in its downward trajectory until the reaction to US jobs data and the future of the global economic recovery after the US tariffs are implemented.
The European Central Bank is scheduled to issue its next interest rate decision on April 17, and market expectations now indicate a 72% probability of a rate cut. By then, the size of the upcoming US tariffs will become clear, as will any inevitable adjustments the White House will make.
European stocks rise ahead of a major event
During yesterday’s trading, European stock market indices rose. According to trading, the STOXX 50 and STOXX 600 indices rose by more than 1%, recovering from a four-session losing streak. This comes after the indices fell by about 1.5% the previous day to reach their lowest levels in two months, as investors prepare for the new tariffs imposed by President Trump, which are scheduled to take effect on Wednesday.
Overall, the scope of these tariffs remains unclear, with reports indicating a 20% tax on most US imports. Meanwhile, eurozone inflation slowed to 2.2% in March, in line with expectations. In corporate news, Thyssenkrupp shares rose more than 7% after analysts at Kepler Cheuvreux raised their rating to “buy,” citing increased steel and defence spending in Germany.
EUR/USD Technical Analysis Today:
According to daily chart trading, the bears’ control over the EUR/USD pair has been confirmed by stabilizing below the 1.0800 support level, paving the way for a stronger downward move. The nearest support levels for the EUR/USD today are 1.0720 and 1.0600, respectively. From the last level, technical indicators will move towards strong oversold levels. Conversely, on the same timeframe, a real reversal of the general trend to upward will not occur without moving towards and above the psychological resistance of 1.1000 again. The performance of the EUR/USD will remain subject to signals from global central bank officials, the reaction to US tariffs, and investor risk appetite, as well as the reaction to US jobs data.
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