The EUR/USD currency pair already having a difficult Monday morning start. It has been oscillating in a wide range and trading about the 1.0800 mark as the American day starts on Monday. Yet the duo can’t ever seem to get going and stay stuck in a dismal, low-growth rut. A risk-averse market environment remains bullish for the US Dollar, providing a firm underlying support against its counterparts. As the daily chart shows, the future does not look bright for the EUR/USD. That indicates that the currency pair will probably continue declining in the following sessions.
As the day opened, the EUR/USD was still trading under a bullish 20 Simple Moving Average (SMA). Moreover, it encountered significant selling pressure just above this key level. Consequently, the duo is set to continue its short-term downward trend, with forecasts seeing the currency pair fall under 1.0790. Such a breach of this bullish threshold could open the doors for even deeper declines down toward the 1.0700 psychological figure.
Technical Analysis and Market Factors
The technical indicators show an unhappy story for the EUR/USD pair. The same 20 SMA now provides strong support, currently at 1.0790. At the same time, the 100 SMA provides resistance at around 1.0850. Moreover, the moving 200 SMA made a support zone nearby 1.0730. These technical levels will be important in shaping the currency pair’s near-term direction.
With the week starting off on such a dovish note, the EUR/USD was quickly traded down to retest 1.0850 during the Asian trading session. This AAA market sentiment was abruptly reversed in March—a flight to safety led to a risk-averse market. Consequently, the price tightened near the area of 1.0800, which supports US Dollar’s bullish strength. The pair’s southward move is a testament to traders’ risk-off sentiment as a result of persistent global uncertainties.
The EUR/USD currency pair is under very strong selling pressure. This can be largely attributed to uncertainty over potential tariffs coming from President Donald Trump. Yet concerns like these have led the duo’s pair to consistently fail to find upward traction, making its outlook all the more cloudy.
Implications of Market Dynamics
European Central Bank (ECB) President Christine Lagarde teeing up a “lose-lose” situation for the EUR/USD. It’s the perfect storm created by today’s market dynamics that are exacerbating this tough condition.
“Lose-lose scenario” – European Central Bank (ECB) President Christine Lagarde
Its currency pair’s ongoing struggles are symbolic of deeper domestic economic paralysis. High inflation, trade tensions and geopolitical uncertainties are weighing heavily on investor sentiment.
For traders, it’s a time of stormy seas. They need to be ready for downside pressure if important support levels stop holding up. A move beneath 1.0790 would shift the focus back on deeper declines toward 1.0700 and act as additional weight on the otherwise struggling currency pair.
Future Outlook
Market participants have been nervously observing the impacts of President Trump’s tariff policies. What they are keen to learn is how all these new developments will impact the global trade dynamic. These developments will undoubtedly be crucial in determining the EUR/USD’s short-term direction going forward.
Traders will be intent on upcoming data releases. They’ll be looking to central bank communications for clues as to where monetary policy is headed on both sides of the Atlantic. This sort of information can offer important hints about the next direction of the EUR/USD currency pair.