Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.0930.
- Add a stop-loss at 1.0730.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 1.0800 and a take-profit at 1.0730.
- Add a stop-loss at 1.0930.
The EUR/USD exchange rate moved sideways as the market waited for the upcoming Liberation Day tariffs. It was trading at 1.0810 on Tuesday, a few points above last month’s high of 1.0945.
European inflation data and US PMIs ahead
The EUR/USD pair wavered as traders waited for Donald Trump’s Liberation Day tariffs scheduled on Wednesday. Donald Trump has vowed to announce large tariffs on imported goods from most countries, including allies like the European Union (EU).
He has already announced a 25% tariff on vehicles made from the bloc and steel and aluminium. The EU, on the other hand, has created a set of tariffs to respond to his tariffs. It has also identified some concessions to offer to the United States.
Economists believe that these tariffs will have a major impact on the economy. For one, Trump has threatened automakers against increasing prices, and is said to be considering stimulus measures to support the agricultural sector.
The next key data to watch will be the flash consumer price index (CPI) data from the euro area. According to Investing, economists expect the data to show that the headline Consumer Price Index (CPI) dropped from 2.3% in February to 2.2% in March, while the core CPI, which excludes the volatile food and energy prices, dropped from 2.6% to 2.5%.
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The other key EUR/USD news will be the latest US manufacturing PMI data by S&P Global and the Institute of Supply Management. Economists expect the S&P manufacturing PMI to move from the expansion zone of February to 49.8 in March.
The report by the ISM manufacturing PMI is expected to move from 50.3 in February to 49.6. Analysts expect that the manufacturing sector will remain under pressure after Trump’s tariffs come in.
EUR/USD technical analysis
The EUR/USD exchange rate peaked at 1.0937 in March and then pulled back to 1.0732 on March 27. It has now crawled back to trade at 1.0815, which is the 61.8% Fibonacci Retracement level.
The pair is about to form a golden cross when the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. A death cross is one of the most bullish patterns in technical analysis.
The pair has formed a cup and handle pattern. Therefore, the pair will likely continue rising, with the initial resistance level to watch will be at 1.0937. More upside will be confirmed if it rises above that level.
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