EUR/USD Weekly Forecast: Euro at Risk as Trade Tariffs Loom

EUR/USD Weekly Forecast: Euro at Risk as Trade Tariffs Loom

The latest weekly forecast for the EUR/USD currency pair highlights a concerning trend for the Eurozone as trade tariffs may loom. With President Trump confirming the implementation of a 25% tariff on goods from Canada and Mexico effective in March, the Euro faces potential threats in the foreign exchange market.

Market Overview

This past week, the EUR/USD pair exhibited bullish behavior as traders placed their focus on Trump’s trade policy announcements. The lack of significant economic data releases throughout the week shifted all attention to the president’s speeches, raising concerns about the implications for the global economic landscape.

• The confirmation of tariffs has alarmed traders who initially anticipated delays until April.
• This uncertainty prompted a rush towards safe-haven currencies, particularly the US dollar.
• Trump’s warnings of similar tariffs targeted at the Eurozone added fuel to the fire.

Key Events to Watch

Looking towards the upcoming week, several major indicators will be essential for market participants:

• US employment data, particularly the nonfarm payrolls report, will provide critical insights into the labor market’s health.
• Recent trends in the manufacturing sector have shown encouraging signs, suggesting economic resilience if this momentum continues.
• A report indicating strong job growth could reduce expectations for further Federal Reserve rate cuts, while a weaker report could increase the likelihood of multiple cuts this year.

Technical Analysis

The technical outlook for the EUR/USD suggests a bearish sentiment as the price struggles against key resistance levels. Here’s what to consider:

• After meeting resistance around the 1.0500 level, the pairing has begun to trend lower.
• The price has breached below the 22-day Simple Moving Average (SMA), indicating a shift toward bearish control.
• The Relative Strength Index (RSI) has also dipped below 50, suggesting increasing bearish momentum.
• Bears are likely to retest support around the 1.0200 level in the coming week.
• A break below this support could signal a continuing downtrend, potentially paving the way for parity.

Conclusion

As market dynamics shift with impending tariffs and key economic data on the horizon, the EUR/USD will likely remain in a state of flux. Traders should keep a close eye on the data releases next week and the ongoing developments regarding trade policies.

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