The EUR/USD currency pair momentarily flipped bullish on the 4-hour chart. Recent declines in… Read More Recent economic indicators and recent developments in US trade policy are contributing to this increase. On Tuesday, shortly after the announcement of the reciprocal tariffs on American shrimp by China, U.S. This is true even for countries that decide not to take countermeasures in response to US measures. This strategic move, coupled with some very positive economic data, has instilled faith in the investors once again. Consequently, the prospects for the euro against the dollar are bullish.
In response to Trump’s announcement, the EUR/USD currency pair tested the critical support line around 1.1100. This momentum came right before some highly significant US economic data releases. After the data release, the duo passed this barrier, soaring to all-time highs. Consumer inflation The annual Consumer Price Index (CPI) fell to 2.4% in March, down from 2.8% in February. This unexpected piece of good economic news sent market optimism soaring even higher.
In addition, the White House declared a 90-day moratorium on the majority of tariffs that had just been rolled out the week before. The previously enacted 25% tariffs are still in effect. Market analysts continue to see this new, if short-lived, pause as a way to hopefully steady trade relations and diffuse some growing international market turmoil. This change in tariff policy has helped create an overall positive trading environment for the EUR/USD pair.
Interim support levels for the EUR/USD pair are now seen at 1.1045, 1.1005 and then 1.0970. These levels act as important battlegrounds for traders to watch as they determine the direction of the market. The daily chart presents a bullish outlook. From a technical perspective, there is room for the pair to make some higher highs, especially as it nears the April high of 1.1146.
Currently the EUR/USD pair is trading above all of its moving averages, which shows a very strong bullish momentum. The 20 Simple Moving Average (SMA) is providing bullish traction upward in the 1.0880 area, further supporting the bullish pattern. Conversely, the 100 and 200 SMAs are still well below the 20 SMA with little upward strength.
As of writing, the EUR/USD pair is trading above the 20 SMA, which stands at around 1.0980. Resistance levels are found at 1.1110, 1.1145 and 1.1190, where buyers could face difficulties in keeping the rally alive. If the pair does head to these resistance levels, traders will be watching closely. They’re searching for signs of either a reversal or ongoing upward pressure.
The recent developments surrounding tariffs and CPI data have created a more favorable backdrop for the euro against the dollar. No wonder investors are responding positively to what might be the right mix of lower tariffs and better economic indicators. Speculators are grabbing short-term gains amid this backdrop. It has laid the groundwork for a deeper conversation about what this means for the future of US-EU trade relations.