EURUSD initially decreased due to weak inflation data from France and Spain, along with an increase in Germany’s unemployment rate. However, the sentiment shifted following reports that the EU is preparing concessions in response to U.S. tariffs.
The EU seeks to secure a partial removal of U.S. tariffs affecting its exports, with new tariffs expected to be implemented after April 2. EU officials are drafting a “term sheet” for negotiations focused on tariff reductions and easing regulatory standards.
Euro Gains Support Amid Trade Optimism
This progress helped lift the EURUSD back above the 100-hour moving average, reaching new session highs near 1.0807. Key upside targets include 1.08195 and 1.08322.
Additionally, today’s low found support in a significant swing zone between 1.07609 and 1.07767. The price also bounced from the 200-day moving average and the 38.2% retracement, indicating a shift in market dynamics.
These recent market movements tell a detailed story beneath the headline numbers. The initial slide in the EURUSD reflected genuine concern. When countries such as France and Spain report muted inflation, it typically dampens expectations for higher European Central Bank (ECB) rates. Couple that with rising unemployment in Germany—Europe’s industrial core—and there’s little surprise that sentiment initially turned cautious, with traders reassessing upward momentum.
Focus Shifts Toward Technical Confirmation
Then came the policy rumblings. Brussels appears keen to counterbalance U.S. trade pressures. With the EU reportedly preparing to ease certain regulatory conditions and cut tariffs in return for concessions from Washington, there’s now a fresh justification for buyers to re-enter euro positions. The idea isn’t necessarily that these talks will be wrapped up on favourable terms, but the fact that negotiations are advancing introduced fresh optimism into currency markets.
From a trading perspective, the break back above the 100-hour moving average was not just a technical detail—it was confirmation that sellers had lost grip, at least temporarily. Once price pushed beyond that barrier, bulls were quick to target known resistance areas. The pair touching 1.0807 serves as a sign of momentum reclaiming direction.
We also observed that the lower boundary—spanning roughly from 1.07609 to 1.07767—acted as a robust floor, catching price in that retreat earlier in the session. This particular swing zone is not arbitrary; it’s a range that has previously acted both as support and resistance, and traders know to watch it. It adds weight when it aligns with key longer-term metrics like the 200-day moving average. The bounce from there, coupled with the 38.2% Fibonacci retracement of the prior move, offered three separate reasons for risk to shift in favour of the euro.
In the near term, attention should remain on how price behaves as it edges into those previously defined upside levels, especially 1.08195. Participation has been rising just below this line on several occasions, but only a firm daily close above it can shift medium-term positioning. If momentum carries through beyond 1.08322, then the path could open toward less congested territory.
For positioning, immediate focus is required near the moving average clusters to determine if support holds on any pullbacks. Likewise, momentum indicators should be monitored for signs that selling interest may start to build again where price previously topped out. Volume remains moderate, which suggests that institutional conviction has yet to fully emerge. We’ll remain attentive to any hints from upcoming eurozone inflation revisions and U.S. labour market data, as both will help shape the medium-term direction of the pair.
