Key Points:
- EURUSD strengthens, climbing by 0.80% and hitting a high of 1.14241
- Dollar weakness continues as trade tensions escalate—with President Trump’s tariff rhetoric fuels uncertainty.
Euro Climbs Past $1.14 as Trade Tensions Escalate
The euro surged on Monday, climbing for the third consecutive day and crossing the $1.14 threshold as investors reacted to renewed uncertainty in global trade. EURUSD reached a high of 1.14241, reflecting a 0.80% gain, closing at 1.14029.
The catalyst behind the euro’s rally is a combination of Donald Trump’s fluctuating tariff announcements, which have weighed on the U.S. dollar and pushed investors toward safer currency options.
After President Trump’s late Sunday clarification that technology products like smartphones and computers remain under tariffs (though not the 145% rate previously suggested), markets were left to absorb mixed signals, leading to further dollar weakness.
The Yen and Euro: Safe-Haven Currencies
The uncertainty stemming from President Trump’s tariff stance continues to undermine confidence in the U.S. dollar.
The euro, despite its own challenges, has emerged as a strong performer amid these trade tensions. Its rise above the $1.14 mark is a testament to its relative strength compared to the dollar, which continues to struggle under the weight of global trade uncertainties.
Alongside the euro, the Japanese yen has also benefitted from the current geopolitical turmoil. Both currencies have drawn attention as safer alternatives to the volatile U.S. dollar, with traders seeking to avoid riskier assets amid the escalating U.S.-China trade conflict.
Technical Outlook for EURUSD
Picture: EURUSD tests resistance at 1.14241 after a steady rally from 1.11584., as seen on the VT Markets app.
EURUSD increased by 0.80%, closing at 1.14029 after opening at 1.13126. The pair saw a steady rise, reaching a high of 1.14241 before retracing slightly to close near 1.14029.
The moving averages (MA 5,10,30) indicate bullish momentum, with the shorter-term moving averages crossing above the longer-term ones. This suggests a potential for continued upward movement. The MACD (12,26,9) confirms this trend, showing a positive histogram as the MACD line (blue) moves above the signal line (yellow).
As EURUSD has breached the key resistance level of $1.14, the outlook remains positive in the short term, particularly if U.S.-China trade talks continue to fuel uncertainty. The euro is expected to hold its ground against the dollar, with traders eyeing any updates in tariff policies and monetary policy from the European Central Bank.
If the EURUSD maintains this upward trajectory, it could target new highs above the 1.14241 mark. However, further developments in the trade war could inject volatility into the currency pair, making it essential for traders to stay alert for any unexpected shifts in market sentiment.
