EUR/USD Review: U.S. Economic Weakness and Trade Uncertainty Drive Downside Risks

XAU/USD

Prediction: Accumulation in an uptrend

Gold is currently in a short-term consolidation phase around $3,317 after a strong rally. However, the primary trend remains bullish, with a rising structure of higher highs and higher lows. After reaching an all-time high of $3,406.20 on April 21, gold corrected due to profit-taking and volatility around U.S. trade policies. Despite this, the long-term outlook remains positive as prices hold above key technical support zones.

FUNDAMENTAL ANALYSIS 

Monetary policy and the Fed’s impact

The U.S. Federal Reserve (Fed) maintains a cautious stance. Investors are expecting two interest rate cuts in 2025, totaling approximately 45 basis points.

The U.S. 10-year Treasury yield hovers around 3.95%, supporting gold by reducing the appeal of the U.S. dollar.

Inflation and market drivers

Markets are awaiting this week’s release of U.S. CPI and PPI data—key factors influencing Fed policy.

Inflation pressures could rise if trade tensions persist. However, President Trump’s recent move to ease import tariffs on cars and parts helps alleviate input cost concerns—temporarily weakening gold’s safe-haven appeal.

Geopolitics and market sentiment

Geopolitical tensions persist: the Gaza crisis and concerns over U.S. governance continue to support safe-haven demand.

Physical demand remains strong: Akshaya Tritiya in India and continued central bank gold purchases—especially from China and India—bolster the market.

The physical shift of gold from London to New York is pressuring inventories and deliveries, reinforcing gold's tangible value as a safe-haven asset.

Despite the recent pullback, the long-term outlook remains bullish, supported by global debt growth and diversification away from the U.S. dollar.

TECHNICAL ANALYSIS 

Key Resistance Levels

• $3,380.692: Gap zone and Bearish Order Block—immediate resistance. A breakout may target $3,440.
• $3,440.000 – $3,500.200: Higher resistance levels aligned with recent historical highs.

Key Support Levels

• $3,298.400: Nearest support; a breakdown could lead to deeper retracements.
• $3,212.249: Strong support within a demand zone.
• $3,167.704: Aligns with the 89-period EMA, notable for medium-term support.
• $3,117.400: Key bottom support, previously a Bullish Order Block.

Technical Indicators:

RSI: Currently at 48.04, indicating a neutral state as the market awaits clearer signals.

Volume: Trading volume is steady but not spiking. A sharp decline in upcoming sessions may indicate a further correction.

Price Action:

• Price is hovering around $3,317, close to the $3,298 support zone.
• Buy Scenario: If price holds above $3,298 or $3,212, consider long positions targeting $3,380–$3,440.

Sell Scenario: If price approaches $3,380 and faces strong rejection, consider short-term selling back toward $3,298 or lower.

EUR/USD

 

Prediction: Short-term downside correction

EUR/USD is undergoing a corrective phase after reaching strong resistance around the 1.1569–1.1572 area (Bearish Order Block). The price is currently oscillating near the EMA 89 support zone at 1.1307–1.1382. While the medium-term uptrend structure remains intact, short-term corrective pressure is present.

FUNDAMENTAL ANALYSIS

Monetary policy and Fed impact

U.S. economic data continues to show signs of cooling:

• Job openings fell by 3.9% in March.
• Consumer confidence dropped to a five-year low.
• The 10-year U.S. Treasury yield declined to 4.177%, the lowest level in three weeks.

These indicators suggest the U.S. economy is slowing, reinforcing expectations that the Federal Reserve may hold or even cut rates in the near future—putting medium-term downward pressure on the U.S. dollar.

Trade and market sentiment

The U.S. and China are continuing tariff negotiations, with China recently lifting a 125% tariff on U.S. ethane—indicating some signs of de-escalation.

However, market sentiment remains under pressure due to the lack of meaningful progress in resolving trade tensions, especially as the Trump administration maintains a hardline stance with many partners.

Canada has responded firmly to U.S. trade policy following its election, raising concerns over prolonged trade friction.

Despite a slight USD rebound from month-end buying and optimism over tariff talks, the DXY index has fallen 9% during the first 100 days of Trump’s second term—marking the worst decline in U.S. presidential history.

Summary: Weak data and geopolitical uncertainty may keep the USD under pressure in the medium term, supporting EUR/USD unless major shocks arise from the ECB.

TECHNICAL ANALYSIS

Key Resistance Levels

• 1.1569–1.1572: Strong resistance zone (Bearish OB) where price previously faced sharp rejection.
• 1.1484: Intermediate resistance that must be broken to confirm continuation of the uptrend.

Key Support Levels

• 1.1382: Near-term support aligned with the 34-period EMA.
• 1.1307: Stronger support aligned with the 89-period EMA.
• 1.1275: Critical support zone; a breakdown could trigger a deeper drop toward 1.1075.

Technical Indicators:

RSI: Currently at 51.00 – neutral, neither overbought nor oversold. Accumulation phase may persist in the short term.

Volume: Stable with no significant spikes, indicating the market lacks strong momentum for a breakout.

Price Action:

• If price rebounds from the 1.1307–1.1382 zone, buying opportunities may target 1.1484–1.1572.
• Conversely, a breakdown below 1.1307 and 1.1275 could activate a bearish move toward the 1.1075 area.

BTC/USD

Prediction: Bullish

Bitcoin remains in an uptrend on the 4H chart, maintaining a structure of higher highs and higher lows. The price is currently undergoing a pullback after hitting strong resistance around the $95,857–$97,766 supply zone. Selling pressure has begun to emerge at this level, though it hasn't broken the overall bullish structure. Investors should closely monitor price reactions at nearby support levels to assess whether the uptrend will continue.

FUNDAMENTAL ANALYSIS

Monetary policy and Fed impact:

March 2025 JOLTS data showed job openings at only 7.2 million—below expectations of 7.5 million and the lowest in four years. U.S. consumer sentiment has also significantly weakened, with confidence falling for a fifth consecutive month to its lowest level since January 2021.

These indicators have increased expectations for Federal Reserve rate cuts in upcoming meetings, putting pressure on the USD and supporting risk assets like Bitcoin. Investors are now watching Fed Chair Powell’s speech on June 18 for potential signals of a policy shift in Q3.

Capital flow and market sentiment:

According to Fidelity Digital Assets, Bitcoin is currently undervalued, with the illiquid supply ratio rising to 63.49%, suggesting increasing long-term holding behavior.

BlackRock’s IBIT ETF saw nearly $1 billion in inflows on April 28, pushing total inflows since April 22 to over $4.5 billion—highlighting strong institutional demand for Bitcoin.

Historically, BTC tends to rally significantly (50–84%) when a combination of low leverage, strong retail sales, and expectations of monetary easing emerge—three conditions now forming again in Q2 2025.

Analysts project BTC could reach $140,000 by October 2025 if macroeconomic conditions remain favorable and Fed signals become clearer.

Mining and environmental factors:

The U.S. now accounts for 75.4% of global hashrate, with over 52% of Bitcoin mining powered by clean energy. This strengthens long-term confidence in the sustainability of the network, especially as mining firms ramp up reinvestment and infrastructure expansion in the U.S.

TECHNICAL ANALYSIS

Key Resistance Levels

• $95,857 – $97,766: Strong supply zone; price is currently facing rejection here. A breakout could target the $100,000 level.
• $95,000: Psychological and technical resistance, previously a short-term high.

Key Support Levels

• $92,095: Nearest support zone. Holding above this level may allow the uptrend to continue. ● $88,756: Near the 200 EMA, a key technical support.
• $85,593: Major support, corresponding to the consolidation area before the strong breakout on April 22.

Technical Indicators:

RSI: Currently around 57—slightly off overbought levels, indicating bullish momentum is pausing but no clear reversal signal yet.

Volume: Spiked during the late-April breakout but is now declining. Continued weakness in volume could suggest a short-term technical correction toward support zones.

Price Action:

•  Watch for price reaction around $92,095. If it holds and bounces, a buying opportunity may arise targeting $95,857–$97,766.
• If this support fails, look for potential entry points near $88,756–$85,593.

 

 

 

 

 

 

 

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