Euro (EUR) continues to consolidate around 1.08 as anticipation builds for a US tariff announcement. The current market sentiment is expected to influence near-term price movements due to the lack of major data releases.
Yield spreads have remained stable recently, providing limited direction. European Central Bank President Christine Lagarde’s supportive comments have contributed to market views, with projections for nearly 20 basis points of easing anticipated for the April 17 meeting.
Technical outlook around support and resistance
The 1.08 level is a focal point, with recent support evident in the mid-1.07s and resistance near 1.0850. The RSI is softening, hovering just above the neutral mark. The broader one-month price range fluctuates between the low 1.07s and mid-1.09s.
With the euro hovering around 1.08 and no weighty economic releases on the immediate horizon, it’s not surprising to observe a quieter tone in the currency markets. Much of the broader movement remains tethered to broader risk sentiment and upcoming policy expectations—not so much to data themselves, but to positioning ahead of them.
Lagarde’s recent messaging has helped anchor expectations for the ECB’s direction of travel. Markets are currently assigning a fairly high probability to some form of rate adjustments—perhaps around 20 basis points—by mid-April, and those forecasts have shaped activity across instruments that track interest rate futures. Her tone, seen as gently supportive rather than forceful, may keep the euro contained unless US monetary policy becomes more hawkish or changes tact more suddenly.
The absence of fresh divergence in bond yields on either side of the Atlantic has kept EUR/USD largely range-bound. There’s little impetus from interest rate differentials at this stage; the spread between two-year government bonds in the US vs. Germany has stayed steady in recent sessions. Without conviction or surprise shifts there, it’s mostly risk positioning and sentiment ahead of political moves—like the expected US tariff announcement—that are guiding short-term strategies.
Market sentiment and positioning signals
In positional terms, what we’re observing in the RSI offers added colour. With the relative strength index now tilting south of 55, and inching toward 50, traders are clearly becoming more cautious. It doesn’t suggest overbought territory yet, nor does it hint at any imminent breakdown, but it’s not pointing toward strong upward momentum either. We are seeing gravity assert itself.
From a technical standpoint, the 1.08 level is holding as a median anchor. Traders placed bids consistently in the 1.0720–1.0750 area last week, indicating that any dips are finding buyers. By contrast, rallies running into the 1.0845–1.0850 zone are being faded fairly consistently. That’s defining the top end of our current near-term ceiling. Wider one-month boundaries, stretching from low 1.07s up to around 1.0950, provide a broader framework should volatility re-emerge, possibly driven by tariff outcomes or a sudden bond repricing.
In the absence of fresh direction from economic releases, derivative traders will likely need to lean more heavily on options volatility, short-dated implieds, and patterns in price action rather than macro catalysts. That could suggest a preference for range-bound strategies or fade-the-move tactics near the established short-term bounds, at least until new policy signals shift conviction more decisively one way or the other.
