EUR/USD Technical and Fundamental Analysis: A Look at the Current Uptrend

EUR/USD

Prediction: Increase

EUR/USD has confirmed a breakout from the previous downtrend and is now in a clear upward trend. The pair has broken through the key resistance zone at 1.08747 and continues to rise toward the 1.09342 – 1.09544 range. The structure of higher highs and higher lows, along with a breakout from the descending channel, supports the short-term bullish outlook.

FUNDAMENTAL ANALYSIS 

Monetary Policy & Impact from ECB & Fed

The European Central Bank (ECB) is under pressure to ease monetary policy as Eurozone inflation dropped to 2.2% in March – the lowest level since November 2024. Core inflation is now at 2.4%, the lowest since January 2022, raising expectations that the ECB could cut rates by up to 65 basis points this year.

Meanwhile, the Federal Reserve (Fed) faces pressure from the economic fallout of President Trump’s tariff policies, with 10-year U.S. Treasury yields plunging to 4.04%, the lowest in five months. Markets are now pricing in a sooner-than-expected rate cut from the Fed.

Trade Tensions & Market Sentiment

Trump announced a 10% blanket tariff on all imports, including 20% on EU goods, stoking fears of a global trade war.

Although the USD gained slightly against several Asian currencies, the EUR is benefiting from safe-haven flows into European assets, as concerns grow over U.S. economic growth.

Global equities, especially in tech, have been sold off heavily, while gold and JPY surged due to their safe-haven status.

Markets are currently in a phase of high volatility due to ripple effects from global trade partners and looming economic retaliation measures.

TECHNICAL ANALYSIS

Key Resistance Levels

●       1.09544 (Short-Term High): A break above this level could lead to a move toward 1.10080.

●       1.10080: A major resistance zone; price reaction here will be crucial.

Key Support Levels

●       1.09342: Recently broken resistance, may now act as support to fuel further gains. ● 1.08747: Important nearby support. If broken, it could trigger a deeper pullback.

●       1.07886: Medium-term support, corresponding to the accumulation base.

●       1.07207: Near the 200 EMA, a strong technical support.

●       1.06281: Deeper key support in case of a trend reversal.

Technical Indicators:

RSI: 73.18 – Currently in overbought territory, suggesting a potential short-term pullback. However, there are no signs of divergence or clear reversal yet.

Price Action:

●       The price has broken out of a descending channel and cleared major technical levels, confirming the bullish short-term trend.

●       As long as price holds above 1.0934–1.0874, it may continue climbing toward 1.0954–1.1008.

EUR/USD is strongly supported by both technical momentum and market sentiment, despite headwinds from U.S. tariffs. However, risks of a technical correction remain due to the overbought RSI. Traders should closely monitor:

●       ECB policy decisions

●       Potential EU retaliatory measures

●       Key U.S. economic data releases

 

 

 

 

 

 

 

 

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