- For five consecutive trading sessions, the EUR/USD (Euro/US Dollar) price has been moving with strong downward momentum.
- As a result, bears have successfully pushed below the 1.0800 support level, extending losses towards the 1.0776 support level.
- This move reverses the gains from last week's upward rebound, which reached the 1.0955 resistance level (the highest for the currency pair in five months).
- At the time of this analysis, the EUR/USD price is stabilizing around the 1.0800 level.
- This performance was anticipated at the beginning of this week's trading, with a forecast of a downward trend within narrow ranges, unless Trump's policies triggered a strong market reaction.
European stocks rebound amid German companies' improvement
During yesterday's trading on stock trading platforms, European stock indices rose. The STOXX 50 index increased by 0.7% to reach 5450 points, while the broader STOXX 600 index rose by 0.6%. This occurred as investors absorbed updates on US trade policy and improved confidence among German companies.
For his part, US President Trump indicated that not all tariffs scheduled for April 2 would apply, with some countries potentially exempt. However, he reiterated plans to impose new tariffs on cars, pharmaceuticals, and countries that purchase Venezuelan crude oil. Meanwhile, Germany's Ifo business climate index rose to an eight-month high in March, supported by a historic debt agreement. In other news, Ukraine and Russia agreed to a ceasefire in the Black Sea following separate talks with US officials in Saudi Arabia.
On the corporate news front, shares of insurance company Baloise rose by 4% after announcing a 60.6% jump in 2024 profits. Conversely, shares of logistics giant Kuehne + Nagel fell by 4% after issuing a warning about weaker full-year operating profits. Retailer Kingfisher's shares also declined by 14% after reporting a 7% drop in annual profits.
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Trading Tips:
The EUR/USD's break below the 1.08 level will incentivize bears to push strongly downwards. Closely monitor the factors influencing the currency pair to identify the best trading opportunities.
US Stock Indices Show Instability
In the US market, US stock prices struggled to find direction as investors assessed the potential impact of pending tariffs and economic uncertainty. Based on performance, the S&P 500 index held steady, while the Dow Jones lost 54 points, and the Nasdaq rose 0.1%. Monday's rally, fuelled by hopes of easing tariffs, lost momentum after US President Trump indicated the possibility of some countries receiving exemptions from the reciprocal tariffs scheduled to take effect on April 2, while also hinting at new tariffs on pharmaceuticals and cars.
Regarding stock performance, Tesla shares fluctuated after rising by 12% at the start of the week, while Nvidia shares fell by 0.7%. KB Home shares dropped by 5% after lowering its sales forecast, and Unifirst shares declined by 12% after Cintas ended acquisition talks. Investors also absorbed a sharp decline in US consumer confidence, which fell to a four-year low, with future expectations dropping to a 12-year low. Meanwhile, traders increased their bets on a US Federal Reserve interest rate cut in 2025, but market analysts remained divided on stock predictions.
EUR/USD Technical Analysis Today:
The EUR/USD performance on the daily chart continues to indicate a downward shift. Movement around and below the 1.0800 support level will technically incentivize bears to push the currency pair lower. On this timeframe, the next support levels are 1.0760, 1.0690, and 1.0600, respectively. At the latter level, technical indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) will move towards strong oversold levels. Conversely, on the same timeframe, the psychological resistance at 1.1000 remains crucial to confirm bulls' control over the EUR/USD trend.
Trading Note:
There are no significant European economic data releases that will impact the Euro. On the US Dollar front, the US Durable Goods Orders reading will be released. Additionally, the currency pair will be influenced by investor sentiment regarding US trade wars, which threaten the future of global economic recovery and negatively impact Euro sentiment.
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