EUR/USD: Current Price Analysis
- The US Consumer Price Index eased more than expected in February.
- Trade war tensions escalate as President Trump threatens additional tariffs.
- EUR/USD hovers around 1.0900, with a bias towards the upside.
The EUR/USD pair retreated from recent highs in 2025 and is currently trading near 1.0900 as Wall Street prepares to open. This pullback was triggered by fresh trade war concerns following President Trump’s announcement of doubling tariffs on Canadian steel and aluminum to 50% starting Wednesday.
While tensions initially rose between the US and Canada, both countries have since backed off and agreed to further negotiations. However, the trade war has now extended to Europe, with the European Commission planning counter-tariffs on US products worth $28 billion starting April 1.
Market sentiment was negatively impacted by these developments, leading to a red close on Wall Street and cautious trading in Asian markets. However, European indexes rebounded after the London session opened, bringing some stability to financial markets.
On the economic front, the US Consumer Price Index (CPI) data for February showed a lower-than-expected increase of 0.2% MoM and an annual figure of 2.8%, with core annual inflation rising to 3.1%. This resulted in a slight decline in the USD as markets awaited further direction.
EUR/USD Short-Term Technical Analysis
The daily chart for the EUR/USD pair suggests a potential correction due to overbought conditions. Technical indicators are retreating but remain at extreme levels. Despite this, the bullish 20 Simple Moving Average (SMA) is above the flat 100 SMA, with the 200 SMA far below the current level, limiting downside potential.
In the short term, the 4-hour chart indicates an upside bias, with the EUR/USD trading above a bullish 20 SMA, supported by the 100 and 200 SMAs. Technical indicators lack clear direction but remain above their midlines.
Support Levels: 1.0885, 1.0830, 1.0790
Resistance Levels: 1.0925, 1.0960, 1.1000
Analysis:
Overall, the EUR/USD pair is facing volatility due to trade tensions and economic data releases. Investors should monitor further developments in the trade war and upcoming economic indicators for potential market movements. The technical outlook suggests a possible correction in the near term, but the overall bias remains towards the upside. Traders should pay attention to key support and resistance levels for trading opportunities.