EUR/USD trades near 1.0450 with mild gains in the Asian session, supported by a weaker US Dollar. However, market sentiment remains cautious as geopolitical tensions and tariff concerns could bolster the Greenback’s safe-haven appeal. US President Donald Trump’s suggestion of a 25% tariff on vehicle, chip, and drug imports creates uncertainty, while Ukraine President Zelenskiy rescheduling his visit to Saudi Arabia indicates continued geopolitical tensions. At the same time, the Euro is under pressure as the Eurozone ZEW Economic Sentiment Index fell short of expectations and rumors of successive ECB rate cuts hang over the currency. Investors shift their attention to the FOMC Minutes for more information on the Federal Reserve’s position regarding economic threats and monetary policy direction.
KEY LOOKOUTS
• Investors eagerly look for the FOMC Minutes to learn about the Fed’s position on inflation, interest rates, and possible economic threats.
• The suggested 25% tariffs on automobile, semiconductor, and pharmaceutical imports may fan trade tensions, tending to bolster the US Dollar as a safe-haven asset.
• The Euro comes under pressure with the ZEW Economic Sentiment Index falling short of expectations and ECB rate cut rumors keeping pressure on the future path of the currency.
• Tensions in Russia-Ukraine and the delayed Saudi Arabia trip by Zelenskiy keep markets guarded, which can influence risk mood and drive price action in EUR/USD.
The EUR/USD currency pair continues to stay in the spotlight with the mixed trend of the currency market on global economic and political fronts. While a softer US Dollar gives the pair temporary boost, rising trade tensions with the imposition of tariffs by Trump on major imports can make the Greenback stronger, curbing the pair’s upside. Also contributing to volatility are geopolitical risks, including the Russia-Ukraine conflict and Zelenskiy’s diplomatic moves. Weaker-than-forecasted economic sentiment data and anticipation of several ECB rate cuts on the Euro side keep the investors guarded. As FOMC Minutes are due to be released, traders will look closely for any indications of upcoming US monetary policy, which can trigger large market movements.
EUR/USD trades around 1.0450 as geopolitical uncertainty and trade tensions make investors remain on guard. Markets look forward to FOMC Minutes to gauge the Fed’s policy attitude.
• The pair trades around 1.0450 with support from a weaker US Dollar but is resistant to geopolitical and trade tensions.
• A 25% levy on auto, semiconductor, and pharmaceutical imports can heighten trade tensions and enhance the safe-haven status of the USD.
• Market players seek indications on the policy orientation of the Fed, inflation prospects, and risk assessment of the economy.
• The ZEW Economic Sentiment Index was lower than forecasted, placing added pressure on the Euro amid talk of ECB interest rate reductions.
• Russia-Ukraine tensions and Zelenskiy’s delayed Saudi Arabia trip contribute to market uncertainty and risk sentiment swings.
• Increasing wagers on three ECB rate reductions this year may further burden the strength of the Euro.
• Market participants are cautious as significant economic indicators and geopolitical events may trigger large price movements in the EUR/USD currency pair.
The global economy is presently defined by a combination of economic policy and geopolitical occurrences, with trade tensions being at the forefront. US President Donald Trump’s plan to impose a 25% tariff on automotive, semiconductor, and pharmaceutical imports has sent investors into a tizzy, as it may affect worldwide supply chains and international trade relationships. In the meantime, the geopolitical front is still unclear, with Ukraine’s President Volodymyr Zelenskiy delaying his visit to Saudi Arabia due to ongoing tensions with Russia. These advances build towards a hesitant market atmosphere wherein policymakers and businesses are observing intently the likely changes in trade policies and diplomacy.
EUR/USD Daily Price Chart
TradingView Prepared by ELLYANA
Economic sentiment has been exhibiting divergent signs in the European space, with the Eurozone ZEW Economic Sentiment Index not meeting forecasts. This has fueled debate over the European Central Bank’s next course of action regarding monetary policy, with market players speculating over potential interest rate changes. While economic growth continues to be the focus, disruptions in global trade and changes in economic policies create an added layer of uncertainty. As crucial reports and policy announcements are revealed, companies and investors are seeking insight into long-term economic strategies that may affect global trade, investments, and financial stability.
TECHNICAL ANALYSIS
EUR/USD is trading around the 1.0450 level, with major resistance and support levels that may determine its next direction. The pair is testing a pivotal price area where a breakout above resistance can indicate further upward momentum, while a fall below support can confirm a bearish trend. Traders are monitoring moving averages and RSI levels closely to determine market sentiment, with volume trends suggesting potential volatility in the future. As the FOMC Minutes and geopolitical events drive market direction, technical indicators will be instrumental in determining short-term price action and key entry or exit points for traders.
FORECAST
EUR/USD is uncertain as several factors drive its possible movement. On the positive side, if the market responds favorably to the FOMC Minutes, reflecting a dovish or cautious approach by the Federal Reserve, the US Dollar may weaken, enabling EUR/USD to pick up pace. Also, any indication of economic strength from the Eurozone or easing of trade tensions would help support the Euro. If the pair is able to break through crucial resistance levels, it could create the opportunity for further gains, drawing in bullish sentiment.
To the downside, fears of growing trade tensions, especially Trump’s suggested tariffs on significant imports, could make the US Dollar a safe-haven currency, subjecting EUR/USD to downward pressure. In addition, the Euro is still exposed to speculation regarding several ECB rate reductions this year, which would negatively impact investor sentiment. Should economic indicators for the Eurozone continue to fall short of forecasts, the pair may have trouble sustaining stability, and a breach below major support levels would be a sign of further potential decline. Traders will be keenly watching upcoming economic reports and geopolitical events for signs of what’s to come.
