- Amid cautious anticipation from financial markets and investors for the announcement of US job numbers, alongside reactions to Trump's tariffs on global economies, the EUR/USD currency pair attempted an upward rebound.
- However, its gains did not exceed the resistance level of 1.0504, recovering from its two-week low losses, as the EUR/USD pair fell last week to the support level of 1.0360.
Will the EUR/USD rise in the coming days?
Be careful, as the EUR/USD is likely to remain greatly affected by the US tariff announcements on Mexico and Canada, scheduled for today, Tuesday, which pose significant risks in both directions for the EUR/USD. According to market experts, the enactment of tariffs from today will be a clear and frightening sign for financial markets that we have officially finished with the conservative/new liberal global order and are moving to neo-mercantilism.
In general, the severity of tariffs will send a clear signal about what the EU can expect when President Donald Trump finally turns his guns towards Europe. In this regard, we know from US Commerce Secretary Howard Lutnick's media tour that tariffs on Canada and Mexico are continuing. However, there is ample room for delays and for the final measures to be less severe than initially promoted. The US minister's comments confirm that the announced comprehensive 25% tariffs are likely to be avoided, which would provide some relief to the Canadian dollar and the Mexican peso, as well as tariff-sensitive currencies like the Euro.
For the US dollar, any easing or delay could lead to weakness and allow the EUR/USD to return to the 1.05 resistance level.
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Tariffs Targeting Europe
President Trump recently confirmed that the US will move forward with tariffs on the European Union. Trump has said he intends to impose tariffs on EU imports because the EU has treated the US “very badly” on trade, ensuring enough uncertainty to ensure that bouts of euro strength are limited. Meanwhile, only when final EU tariffs are agreed can we expect the kind of clarity that will allow the euro to enter a more decisive recovery.
Trading Tips:
We still recommend selling the euro against the US dollar in the coming days as Trump’s policies will remain a major factor in weighing on any gains for the euro against the US dollar
US jobs numbers under the microscope
According to the economic calendar data, the biggest interest for financial markets in general and the forex market in particular will be the announcement of the US non-farm payrolls report on Friday, the highlight of the week. In this regard, the market is expecting a reading of 185,000 for February, up from a previous print of 143,000. Overall, a strong US jobs report should enhance economic resilience, push back expectations of a Fed rate cut and boost the US dollar. Thus, a disappointing release could weaken the US dollar against other major currencies.
Overall, the US dollar’s weak trend for most of 2025 reflects a shift in data from outright US exceptionalism to something more benign. Recently, this has allowed the market to price in further US rate cuts from the Fed, helping the euro-dollar pull out of its lows. A continuation of the trend should limit any weakness this week, even if there are some negative headlines from the tariffs on the euro. Let’s not forget the European Central Bank’s decision next Thursday, when another rate cut is expected alongside new guidance.
What will be interesting is how the ECB will react to signs of renewed disinflation in Germany, France, and Spain, which suggests more room for interest rate cuts after March. If the ECB indicates that it has become more comfortable with inflation and that the economy needs more support through interest rate cuts, the Euro could come under pressure. However, analysts agree that the data from the Eurozone is not sufficient to justify a major change in the ECB's path, which would limit any market reactions after the decision.
EUR/USD Technical Analysis Today:
According to recent trading, the EUR/USD exchange rate faces downside risks in the form of tariff announcements, the ECB decision, and the US jobs report. According to Forex market trading, the EUR/USD pair failed last week to break through the ceiling at 1.05, and the subsequent retreat takes it below the 9-day exponential moving average (EMA) at 1.0429.
Overall, this week’s forecast model rules that a decline below the nine-day EMA is a signal of potential further weakness as the short-term trend turns to the downside. Accordingly, the initial target is last week’s low at 1.0392, ahead of the psychological support at 1.03. A break will take us to the support level of 1.0245, which will increase talk about the euro-dollar parity price and at the same time move the technical indicators towards strong oversold levels.
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