- The EUR/USD outlook reveals rising commerce tensions between the US and the Eurozone.
- Trump applied a 25% tariff on metal and aluminum imports.
- US inflation elevated by 0.2% in February, down from 0.5%.
The EUR/USD outlook reveals rising commerce tensions between the US and the Eurozone which are weighing on the euro. Nevertheless, gentle US inflation figures have additionally pressured the greenback, placing a ground on euro declines.
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On Wednesday, Trump applied a 25% tariff on metal and aluminum imports, affecting main economies like Canada and the US. Each international locations have been prepared to reply instantly with counter-tariffs. Nevertheless, these commerce wars can have an enduring influence on these economies, weakening their currencies. Because of this, the euro eased barely from its 5-month peak.
The greenback was additionally fragile as market members feared a possible US recession as a result of ongoing commerce wars. Financial information has already signaled weaker demand. Furthermore, inflation information on Wednesday got here in beneath estimates. The month-to-month determine elevated by 0.2%, down from 0.5%.
In the meantime, the annual determine elevated by 2.8%, down from 3.0%. If inflation has resumed its downtrend, policymakers will acquire confidence that it’ll attain the two% goal. Because of this, Fed price lower bets elevated, pushing the greenback down.
Nevertheless, the trail of inflation will even depend upon Trump’s commerce insurance policies. As Powell famous final week, there was no rush to decrease borrowing prices.
EUR/USD key occasions right this moment
- US core PPI m/m
- US PPI m/m
- US unemployment claims
EUR/USD technical outlook: Value exams the 30-SMA help
On the technical facet, the EUR/USD worth has fallen to retest the 30-SMA help. Nevertheless, the bias is bullish for the reason that worth remains to be above the SMA and the RSI is above 50. Bulls have maintained a steep rally till the worth reached the 1.0901 resistance degree. Right here, worth motion confirmed a rejection of upper costs.
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On the identical time, the RSI made a bearish divergence, indicating weaker momentum. This allowed bears to resurface and retest the 30-SMA help. If the worth wants a deeper correction, it should break beneath the SMA, seemingly dropping to the 1.0701 help.
After this, bulls might return to hunt new highs above 1.0901. One other chance is that the worth will bounce off the 30-SMA to hunt a brand new excessive and proceed the uptrend.
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