- As previously predicted, the EUR/USD's attempts at a bullish rebound will remain limited and cautious amidst uncertainty regarding President Trump's rapid political initiatives, including spending cuts, tariffs, and the upcoming German elections.
- The EUR/USD's gains last week reached the 1.0505 resistance level before closing trading stable around the 1.0457 level, as investors' risk aversion increased, which is positive for the US dollar as a safe haven.
Trump's Policies Continue to Disrupt Financial Markets
According to trading and through licensed trading platforms… Investor sentiment has been affected amid US President Trump’s announcement of tariffs on several major US trading partners and since his return to the White House last month, he has launched a campaign to reduce the 2.3 million-strong federal workforce. On the economic front, data released last Friday showed that US business activity fell to its lowest level in 17 months, indicating that companies and consumers are becoming increasingly frustrated with the policies of the Trump administration.
According to stock trading platforms, US stock indices, the Standard & Poor's 500, the Dow Jones Industrial Average and the Nasdaq Composite fell amid losses in industrials, consumer discretionary, technology and energy stocks. The three major indices also ended the week lower. In European markets, stocks were volatile last week ahead of the German elections on Sunday. According to trading, the Stoxx Europe 600 index rose by 0.52%, reversing two days of declines. It ended the week up by 0.26%.
In the US market, the Dow Jones Industrial Average fell by 1.69% to 43428.02, the S&P 500 fell by 1.71% to 6013.13 and the Nasdaq Composite fell by 2.20% to 19524.01.
Top Forex Brokers
Trading Tips:
We recommend selling the euro against the US dollar from all attempts to rebound upwards. Moreover, without risk and monitoring the factors affecting the performance of the currency pair to come out with the best trading opportunities.
Factors Affecting the EUR/USD This Week
Keep in mind that this week's economic calendar is full of important and influential events and data. In the US, the personal consumption expenditure report and comments from US Federal Reserve officials will be the center of attention. Personal consumption expenditure prices will provide crucial insights into evolving price pressures, following US consumer price index and producer price index figures that came in higher than expected. Personal spending growth is expected to slow to 0.2%, while personal income is likely to rise by 0.4%, in line with the increase in December.
Meanwhile, the second estimate of GDP growth in the first quarter of 2025 is expected to confirm that the US economy grew at an annual rate of 2.3%, in line with the initial estimate. In addition, durable goods orders are expected to rise by 1.3% after a 2.2% decline in December.
In Europe, the general elections in Germany on Sunday will be closely monitored. Opinion polls suggest that the conservative CDU/CSU bloc, led by Friedrich Merz, is on track to win, but may need coalition partners to form a government amidst ongoing economic stagnation. Elsewhere in Europe, investors will focus on the minutes of the ECB's January policy meeting for insights into the central bank's future moves. Inflation data will be a highlight, with preliminary figures for February released from Germany, France, Italy and Spain. Germany's headline inflation rate is expected to remain at 2.3%, while the harmonized rate may fall to 2.6%. In the same vein, the Eurozone will release its final inflation estimates for January.
EUR/USD Technical Analysis Today:
According to trading for the EUR/USD pair on the daily chart, the bulls' attempts to rebound the euro-dollar pair upwards are still weak and prone to rapid collapse, as the negative pressure factors on the euro are still the strongest, and in return, the US dollar is gaining momentum from the demand for it as a safe haven, in addition to the strength of the US economy compared to the situation in the Eurozone, and therefore the strategy of selling the euro-dollar is the strongest, and currently the closest resistance levels for the currency pair are 1.0530, 1.0600 and 1.0655, respectively.
In contrast, and over the same period of time, the bears' success in moving the Euro Dollar pair below the support level of 1.0370 will return the technical selling operations towards stronger bearish levels. This week's US economic news will be extensive and important, so be careful about your reaction to its results.
Ready to trade our EUR/USD daily forecast? Here’s a list of some of the top forex brokers in Europe to check out.