The Euro (EUR) rose against the US Dollar (USD), currently at 1.1044, with resistance at 1.1050 and support at 1.0910 and 1.0880. Daily momentum shows flat movement while the RSI indicates a potential rise.
The EU is voting on a revised retaliatory package against US tariffs, now targeting EUR21 billion in US goods, down from EUR26 billion. Items like bourbon and wine have been removed.
Further Countermeasures Anticipated
Further countermeasures are expected by April, especially concerning tariffs on cars. The EU trade chief stated negotiations are prioritised to avoid a trade war, although all retaliatory options remain under consideration.
The euro’s recent strength, shown by its rise to 1.1044, reflects a steady demand, even as daily indicators remain broadly neutral. Importantly, that 1.1050 level marks more than a line on the chart—it’s a psychological boundary. We’ve seen this kind of hesitation before: if the price momentarily breaches it but fails to hold, the move often reverses promptly. The support levels sit comfortably lower, giving plenty of breathing room before a complete trend reassessment is warranted. For short-term contract positioning, watching whether the euro can stabilise above resistance will matter more than the initial breakout itself. False breaks are frequent in these types of flat momentum conditions.
Momentum remains sideways, so the focus has shifted to RSI readings hinting at upside potential. In isolation, such signals are rarely useful, but paired with recent macro triggers, they gain added weight. The RSI’s suggestion of building pressure may prompt increased option interest, especially in the near-dated expiries. Traders looking at volatility exposure might consider straddles, albeit cautiously sized, as we remain within a larger digestion phase.
The trimmed EUR21 billion response to US tariffs tells us more than just the numbers. By excluding politically sensitive goods like bourbon and wine, the bloc sent a quieter signal. It’s not about de-escalation per se—it’s about timing. After the shift from EUR26 billion, we can deduce that measured rhetoric prevails for now. That said, the removal of specific American staples doesn’t rule out stronger action later.
Implications Of Automotive Tariffs
Next steps matter more. The mention of automotive tariffs ahead of April subtly raises the stakes. Historically, car duties have sparked sharper reactions on both sides, and for market participants, this means reassessing exposure to sectors correlated with German manufacturing, particularly large exporters. Any new headline out of Brussels or Washington on this may widen implied vol spreads in asset classes tied to trade-sensitive industries.
When the bloc’s trade representative mentioned prioritising talks over escalation, the message was clear: avoid trigger-pulls unless forced. But the inclusion of “all options on the table” ensures optionality remains. For traders, it implies a floor beneath volatility expectations. In real terms, this may justify elevated premiums in forward-dated euro-dollar pair options and support interest in calendar spreads as a tool to manage exposure across possible announcement timeframes.
Execution quality will rely on responsiveness, not prediction. With the underlying move muted, option flow should stay incremental—tacticians may prefer staggered entries around known levels instead of chasing momentum. Economic releases are presently overshadowed by policy noise, so trade reaction to policy-speak could overpower traditional fundamentals in price discovery.
