Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.0937.
- Add a stop-loss at 1.0700.
- Timeline: 1-2 days.
Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.0700.
- Add a stop-loss at 1.0900.
The EUR/USD exchange remained under pressure as the market focused on the ongoing trade war between the United States and Europe that will intensify today. The pair was trading at 1.0785, lower than this year’s high of 1.0937.
US and EU trade war
The US and the European have continued their trade war this year. This war was started by Donald Trump when he implemented tariffs on imported steel and aluminium earlier this year. He then intensified it last week when he imposed tariffs on all imported vehicles, including from Europe.
The trade war will accelerate on Wednesday when Trump launches his Liberation Day tariffs targeting goods, including from the EU. The EU has threatened to impose more tariffs on US goods and services. It has also vowed to use its anti-coersion instrument for the first timel. The tool allows for the EU to focus on other areas like intellectual property and public procurement.
Top Forex Brokers
This trade war will affect all countries, and possibly push some of them, including the United States into a recession.
The EUR/USD pair reacted mildly to the latest European inflation data. According to Eurostat, the headline consumer price index slowed from 2.3% in February to 2.2% in March, while the core CPI moved from 2.6% to 2.4%. This is a sign that the bloc’s inflation was moving in the right direction, a situation that may change soon after tariffs start.
Another report from the US showed that the manufacturing PMI retreated slightly in March. The S&P Global report showed that the figure dropped from 52.7 to 50.2, while the ISM figure revealed that the figure dropped from 50.3 to 49. These numbers may worsen when tariffs come in.
EUR/USD technical analysis
The daily chart shows that the EUR/USD pair has pulled back in the past few days. It has dropped from this year’s high of 1.0937 to the current 1.0780, which is a few points below the 38.2% Fibonacci Retracement level.
The pair has remained above the 50-day moving average and last month’s low of 1.0732. It is also forming a cup and handle pattern, a popular continuation sign. Therefore, the pair will likely have a bullish breakout, with the next point to watch being at 1.0937. A crash below the support at 1.0732 will invalidate the bullish outlook.
Ready to trade our daily Forex signal? Check out the best forex brokers in Europe worth using.