Key Points:
- EURUSD jumps by +1.54%, surpassing $1.10 for the first time since 2024.
- President Trump announces a 10% baseline tariff on all U.S. imports.
- Traders react to the EU’s threat of countermeasures, with growing expectations of an ECB rate cut and soft economic outlook in the U.S. in focus.
EURUSD Surges to $1.10 as Dollar Weakens Amid Tariff News
The Euro surged more than 1.5% on Thursday, pushing above the key level of $1.10, reaching as high as $1.10157, after President Donald Trump unveiled his latest round of tariffs.
The dollar has been under pressure following the announcement of a 10% baseline tariff on all U.S. imports, sparking concerns over further trade tensions. As a result, the Euro gained sharply against the U.S. dollar, climbing to its highest level in recent months.
Impact of the U.S. Tariffs and EU Response
The European Union, one of the largest trade partners of the U.S., is set to be heavily impacted by the tariffs, with President Ursula von der Leyen warning of a “major blow” to the global economy. This situation has led to fears of escalating trade conflicts, with the EU preparing countermeasures to protect its economy.
Traders are now pricing in a nearly 90% chance of a 25 basis points (bps) rate cut by the European Central Bank (ECB) in April, driven by the economic uncertainty. Additionally, there are rising expectations that the ECB deposit rate could fall to 1.82% by December, down from previous estimates of 1.9%.
Technical Outlook
Picture: EURUSD surges past 1.1000 to test resistance at 1.1020 after a steady rise from 1.0779, as seen on the VT Markets app.
EURUSD increased by 1.54%, closing at 1.10157 after opening at 1.08484. The session saw a sharp upward movement, reaching a high of 1.10203 before retracing slightly to close near 1.10157.
The moving averages (MA 5,10,30) indicate strong bullish momentum, with short-term MAs above the longer-term moving averages. This suggests a continuation of the upward price trend. Additionally, the MACD (12,26,9) shows a significant shift in momentum as the histogram is expanding and the MACD line (blue) is above the signal line (yellow), confirming the strength of the bullish trend.
Key levels to monitor include 1.1020 as immediate resistance and 1.0800 as key support. A break above resistance could signal further upward movement, while a drop below support could suggest a potential bearish reversal.
Market participants are closely monitoring President Trump’s tariff measures and any potential market reactions in the coming days.
