- The echo of the announcement of European economic and fiscal stimulus, especially from Germany, along with weak US economic data results, continues to support the upward stability of the EUR/USD currency pair.
- These gains have reached the resistance level of 1.0947, the highest for the pair in more than four months, before stabilizing around 1.0885 at the time of writing the analysis.
Key Factors for Euro Gains and Their Effectiveness
According to Forex market trading and through reliable trading companies’ platforms, the Euro price has stabilized in its upward trajectory against other major currencies, led by its advance against the US dollar, as traders welcomed signs of a potential ceasefire in Ukraine. Kyiv accepted a US-mediated proposal for a 30-day truce with Russia as part of an agreement with the Trump administration to lift the freeze on military aid and intelligence sharing.
The United States will now submit the proposal to Russian President Vladimir Putin for approval. Meanwhile, trade tensions escalated after a 25% US tariff on steel and aluminium imports from Canada, Australia, the European Union, and other countries took effect on Wednesday, prompting countermeasures from the European Union. The EU announced retaliatory tariffs on €26 billion worth of US goods, scheduled to take effect in April, including steel, aluminium, textiles, leather goods, poultry, beef, eggs, and other products.
The Euro’s rise was also boosted by expectations that increased defence spending will strengthen the bloc’s economy, while the ECB’s easing cycle may be nearing its end soon.
Trading Tips:
The EUR/USD path has turned upward, and the lack of momentum for further progress will support profit-taking selloffs at any time.
Tariffs Negatively Affect the US Dollar
Another day, and a new escalation in tariff threats, generates more uncertainty and weakness for the US dollar. According to forex market trading, the US dollar continued its losses against the euro, the British pound, and other major currencies after US President Donald Trump launched a new wave of tariffs, increasing uncertainty for American investors and businesses. He announced on social media that he would raise tariffs on Canadian steel and aluminium to 50%, starting tomorrow, and declared a “national emergency regarding electricity.”
He added that the tariffs would remain in place until Canada removes its trade barriers on dairy and electricity products. In addition, he said he would also “significantly increase” tariffs on Canadian auto parts on April 2 if Canada does not remove tariffs on dairy and other US goods.
In general, Trump’s seemingly erratic, reactionary, and random approach to tariffs has been a major factor in the loss of market confidence, leading to sharp selloffs in US stocks. The US Dollar Index also declined, as markets expect higher inflation and lower growth in the future. The GBP/USD exchange rate reached 1.2988, putting it on the verge of its four-month high. Moreover, The EUR/USD exchange rate continued its rise to 1.0945.
According to economic experts, tariffs can have a triple effect, increasing concerns about inflation and growth, and negatively affecting confidence. In this regard, data released mid-week showed that US small business confidence has declined further amid increasing economic uncertainty. According to economic calendar data results, the National Federation of Independent Business (NFIB) Small Business Optimism Index fell for the second consecutive month in February to 100.7, with the uncertainty index rising to its second-highest level ever.
EUR/USD Technical Analysis Today:
According to daily chart trading, the general trend for the EUR/USD currency pair remains upward, and the psychological resistance of 1.1000 will remain the most prominent for the strength of the bulls’ control, and at the same time, it will push technical indicators towards strong overbought levels. As we mentioned before, caution will remain in place due to the proximity of profit-taking selloffs. Currently, the closest support levels for EUR/USD on this time frame are 1.0790 and 1.0680, respectively. Also, a break below the latter will trigger a reversal of the current upward trend. Today, EUR/USD will be affected by the announcement of the remaining US inflation figures and the weekly US jobless claims, in addition to signals from global central bank officials.
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