EUR/USD Soars to Fresh Highs Amid Global Tensions

  • US Dollar Continues Sell-Off Amid Trade War Concerns
  • German Political Agreement Boosts Euro Confidence
  • Technical Analysis Indicates Potential for Further Gains

The EUR/USD pair reached a high of 1.0721, a level not seen since November 2024, driven by a combination of global factors impacting the US Dollar and positive developments in the Eurozone.

Key Developments

The US Dollar faced selling pressure as President Trump’s trade war escalated, with new tariffs imposed on imports from Canada, Mexico, and China. These actions led to retaliatory measures from affected countries, creating uncertainty in the markets.

On the other hand, the Euro received a boost from political agreements in Germany. The coalition government’s plan to increase defense and infrastructure spending has instilled confidence in the Euro, amid concerns about the US’s commitment to the Western alliance.

Data Insights

The latest data releases include the European Services and Composite Purchasing Managers’ Index (PMI) figures. While German numbers saw downward revisions, the EU Services PMI remained slightly below previous estimates, indicating stable economic activity.

In the US, the ADP Employment Change report showed a weaker-than-expected job growth in the private sector, adding to the Dollar’s woes. Further data releases later in the day will provide more insights into the economic landscape.

Technical Analysis

On the technical front, the EUR/USD pair remains near recent highs, supported by weakening USD fundamentals. While short-term indicators suggest overbought conditions, the overall market sentiment favors buying opportunities on potential pullbacks.

Support and resistance levels for the pair are as follows:

Support Levels: 1.0675, 1.0630, 1.0590

Resistance Levels: 1.0725, 1.0770, 1.0815

Conclusion

The current market dynamics suggest a mix of global tensions and positive political developments driving the EUR/USD pair. While short-term corrections are possible, the overall outlook remains bullish, with potential for further gains in the near future.

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