- For four consecutive trading sessions, the EUR/USD currency pair has been attempting to rebound and recover from its lowest levels in a year, which reached the support level of 1.0496 at the end of last week.
- This is due to the strength of Trump’s trade policies, which provided further strength to the US dollar against other major currencies. The rebound gains for the EUR/USD pair did not exceed the level of 1.0609 before stabilizing around the level of 1.0588 at the time of writing this analysis, awaiting further stimulation to avoid further collapse.
Factors Weakening the Euro Price Performance
According to the Forex market trading, the euro’s losses came primarily in light of the impact of investor sentiment on concerns about the impact of US trade tariffs on Eurozone growth and geopolitical tensions. Investors have been buying safer assets, especially after Ukraine used Western-made missiles to strike Russia, and in return, Russian President Vladimir Putin expanded Russia’s nuclear doctrine to allow nuclear responses to major conventional attacks.
In addition, European Central Bank officials warned that new US tariffs could harm economic growth in the Eurozone, reducing inflation concerns. The European Central Bank has cut interest rates three times since last June, as inflation is approaching its target of 2%, but growth forecasts have been cut twice. In general, financial markets largely expect the ECB to cut interest rates by 25 basis points next month, with a smaller chance of a larger move.
European Stocks Continue to Suffer Losses
According to stock trading platforms, selling pressure continues on the performance of European stock market indices in yesterday’s trading, Tuesday. The Stoxx 50 fell 0.9% and the Stoxx 600 fell 0.4%, closing at its lowest in more than three months and posting its third straight session of losses.
Most sectors were lower, with banks down 1.4% and travel stocks down 1%. Meanwhile, healthcare stocks rose 0.6%. furthermore, Investors moved towards safe-haven assets after Russia announced expanded terms for nuclear retaliation. Earnings updates, however, offered mixed signals: Imperial Brands reported a better-than-expected 4.6% rise in annual profit, while Germany’s Thyssenkrupp pointed to challenges at its steel division with a €1 billion impairment. Caixabank shares fell 5% after unveiling a new strategy, and Nestlé shares fell 1.9% as it announced further cost-cutting measures.
What will affect the performance of the Euro Dollar today?
According to economic data, the EUR/USD price today will be affected by the announcement of the German producer price index reading and expected statements from European Central Bank Governor Lagarde to look for signals from bank officials about the future of the ongoing easing cycle considering European political and economic concerns and under a US administration led by Trump. Later today, the EUR/USD will also be affected by new statements from some US Federal Reserve policy makers.
EUR/USD Technical Analysis
According to recent trades, the EUR/USD currency pair has formed lower consecutive peaks with a downward trend line that has been steady since last October. Technically, the price is rising from its lowest levels around 1.0490 and may be about to test the resistance zone. At the same time, Fibonacci retracement levels on the latest swing high and low show that the 61.8% Fibonacci level is closest to the trendline around the 1.0775 level. Meanwhile, the 50% level coincides with the dynamic resistance of the 100 simple moving average at 1.0721. therefore, the minor correction may actually find sellers at the 38.2% Fibonacci at 1.0666.
Overall, if either of these levels hold as resistance, EUR/USD could make its way back to the swing low or lower. Also, the 100 SMA is below the 200 SMA to indicate that the stronger trend is down or that the downtrend is likely to resume rather than reverse. As per the technical indicators, the Stochastic is already in the overbought zone, so a downward shift suggests that selling pressure is ready to increase. The oscillator has plenty of room to slide before reaching the oversold zone, so the price could continue to follow the same trend. On the other hand, the RSI has room to rise before reaching overbought levels, so the correction could continue until that happens. However, a break above the trend line and the dynamic turning point of the 200 SMA could signal the beginning of a reversal.
EUR/USD Signals:
Dear reader, we advise you to monitor the movement of the Euro against the US Dollar EUR/USD price around and below the support level of 1.0500 to look for buying levels for the Euro Dollar, waiting for an opportunity to rebound upwards. Decisively, by considering not taking risks and activating profit limit and stop loss orders to ensure the safety of your trading account from any sudden price reversals. To get EUR/USD recommendations and other free direct trading signals through our website, register your presence with us.
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