Euro up 2% in a strong week, as trade uncertainty pressures the dollar
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EUR/USD Breaks Higher as Dollar Weakens on Tariff Speculation
The EUR/USD pair surged 2% last week, climbing from below $1.03 to near $1.05, as uncertainty over Trump’s tariff plans rattled the U.S. dollar. While the executive order on reciprocal tariffs was signed, the lack of specific details and timelines has left traders in limbo, leading to a dollar selloff that benefited the euro, sterling, and yen. With markets on edge for further tariff announcements this week, the euro’s strength will be tested against upcoming U.S. trade policy decisions. If Trump unveils an aggressive trade stance, it could trigger another round of volatility in forex markets.
Trade Tensions Keep Dollar Traders on Alert
The USD is facing choppy price action as investors struggle to gauge the scope and impact of upcoming tariff policies. For the past six weeks, EUR/USD has oscillated between $1.02 and $1.05, with no clear breakout yet. Market participants expect clarity soon, as Trump is set to announce further steps on trade reciprocity. A stronger dollar reaction could emerge if tariffs are confirmed, but if uncertainty lingers, the euro may continue to hold its recent gains.
Technical Outlook: Can the Euro Maintain Its Momentum?
On the weekly chart, EUR/USD remains below key long-term moving averages, with the 50-day SMA at $1.0740, the 100-day SMA at $1.07, and the 200-day SMA at $1.0762—all acting as major resistance levels. On the daily chart, the setup is more favorable for euro bulls, with the 50-day moving average already under the exchange rate. If EUR/USD pushes above $1.05 convincingly, traders will watch $1.07 as the next major upside target. If momentum fades, the 1.0350-1.0320 region remains a key support zone, with a deeper retracement likely if tariff policies boost the dollar.
Outlook: Will the Euro Extend Gains or Face Resistance?
For now, the euro’s recovery is intact, but the strength of the rally depends on upcoming U.S. trade actions. If tariff escalation weakens risk sentiment, the dollar could regain strength, pressuring EUR/USD back toward its range lows. Conversely, if trade uncertainty lingers, the euro may hold its recent gains and attempt a push toward $1.07.
The EUR/USD pair surged 2% last week, climbing from below $1.03 to near $1.05, as uncertainty over Trump’s tariff plans rattled the U.S. dollar. While the executive order on reciprocal tariffs was signed, the lack of specific details and timelines has left traders in limbo, leading to a dollar selloff that benefited the euro, sterling, and yen. With markets on edge for further tariff announcements this week, the euro’s strength will be tested against upcoming U.S. trade policy decisions. If Trump unveils an aggressive trade stance, it could trigger another round of volatility in forex markets.
Trade Tensions Keep Dollar Traders on Alert
The USD is facing choppy price action as investors struggle to gauge the scope and impact of upcoming tariff policies. For the past six weeks, EUR/USD has oscillated between $1.02 and $1.05, with no clear breakout yet. Market participants expect clarity soon, as Trump is set to announce further steps on trade reciprocity. A stronger dollar reaction could emerge if tariffs are confirmed, but if uncertainty lingers, the euro may continue to hold its recent gains.
Technical Outlook: Can the Euro Maintain Its Momentum?
On the weekly chart, EUR/USD remains below key long-term moving averages, with the 50-day SMA at $1.0740, the 100-day SMA at $1.07, and the 200-day SMA at $1.0762—all acting as major resistance levels. On the daily chart, the setup is more favorable for euro bulls, with the 50-day moving average already under the exchange rate. If EUR/USD pushes above $1.05 convincingly, traders will watch $1.07 as the next major upside target. If momentum fades, the 1.0350-1.0320 region remains a key support zone, with a deeper retracement likely if tariff policies boost the dollar.
Outlook: Will the Euro Extend Gains or Face Resistance?
For now, the euro’s recovery is intact, but the strength of the rally depends on upcoming U.S. trade actions. If tariff escalation weakens risk sentiment, the dollar could regain strength, pressuring EUR/USD back toward its range lows. Conversely, if trade uncertainty lingers, the euro may hold its recent gains and attempt a push toward $1.07.