EUR/USD: Struggling Below Key Levels, What’s Next for the Currency Pair?
EUR/USD continues to face downward pressure, as the pair hovers around 1.0800, with the broader trend still showing bullish signs despite intraday weakness. Despite recent losses, EUR/USD remains above key support levels, including the 20-day and 100-day Simple Moving Averages (SMA) at 1.0773 and 1.0729, respectively, offering some support to the pair. However, the momentum seems to be weakening as the pair approaches significant technical levels. Will EUR/USD manage to reclaim its previous highs, or is further downside on the horizon? The price is currently caught in a tight range, reflecting indecision as investors wait for more decisive triggers. EUR/USD is trading around 1.0785, a critical level to watch, with immediate support at 1.0773 and resistance at 1.0820. These levels could play a significant role in determining the direction in the coming sessions.
From a technical perspective, the market structure for EUR/USD remains bullish for the broader trend. The 100-day and 200-day SMAs point higher, signaling that the bullish trend remains intact, but the lack of a clear breakout keeps traders in a cautious stance. The recent pullback towards the 1.0800 level could provide a buying opportunity if it holds above the support levels. However, with the Relative Strength Index (RSI) at 57, momentum remains neutral, and any shift below 1.0770 could confirm a bearish reversal. The combination of mixed technical indicators and external factors, such as geopolitical risks and U.S. tariffs, keeps traders on edge as they await further clarity.
Technical Outlook for EUR/USD: Key Levels to Watch
The 1.0800 support level has been holding firm, but there are key risks ahead for EUR/USD, especially as external factors like U.S. economic policies and market sentiment impact the price action. The 30-day exponential moving average (EMA) continues to support the bullish outlook, but the Moving Average Convergence Divergence (MACD) has started signaling a potential sell-off, raising caution among traders. The initial downside target remains at 1.0770, with further support levels seen at 1.0765 and 1.0729. On the upside, resistance at 1.0820 and 1.0853 will be critical for any push higher.
The current sentiment in the market is reflected in EUR/USD's price action, which is caught in a narrow range as investors await more information, especially regarding U.S. trade policies. The market's cautiousness is evident, with the pair unable to decisively break either way. The broader outlook for EUR/USD still favors a bullish trend, but the ongoing consolidation suggests that market participants are waiting for a catalyst to drive the next major move.
Geopolitical and Economic Pressures Influence EUR/USD
U.S. economic policy remains one of the most significant factors influencing the EUR/USD pair. Recent statements from former President Donald Trump regarding tariff policies, including potential tariffs on automobiles, pharmaceuticals, and technology products, have added further uncertainty. The markets are waiting for further developments, particularly regarding the implementation of new tariffs scheduled for April 2. While some reports suggest that certain countries may be exempt from the tariffs, the lack of clarity continues to create volatility in the markets, including EUR/USD.
Moreover, U.S. economic data remains a focal point, with weak consumer confidence and mixed PMI data contributing to a subdued outlook for the U.S. economy. Although the Services PMI showed strength, the Manufacturing PMI disappointed, signaling an uneven recovery across sectors. These factors are likely to keep the U.S. Dollar index (DXY) contained near the 104.30 level, as the market digests mixed signals from the U.S. economy. The Federal Reserve's cautionary tone further limits any potential for a substantial dollar decline, as policymakers signal slower progress on inflation and delayed rate cuts.
What Does This Mean for EUR/USD in the Short-Term?
The EUR/USD pair remains under pressure, with the price consistently failing to break above the 1.0800 level. The broader bullish trend is still intact, but technical signals, such as the RSI and MACD, suggest that momentum could shift. A move below 1.0770 would confirm further downside risk, with the next support level at 1.0600. However, the support from the moving averages and the potential for a recovery in risk sentiment could prevent the pair from falling further. The short-term outlook remains neutral, with a slight bearish bias, as the market remains cautious ahead of crucial economic events and developments in U.S. policy.
As for trading strategies, traders may consider watching for any breakouts beyond 1.0820 to gain confidence in a continuation of the bullish trend, or alternatively, a breakdown below 1.0770 could open up a stronger bearish momentum towards 1.0600. The current range-bound nature of EUR/USD suggests that the market is awaiting a key catalyst to drive it beyond the current range.
