Introduction to EUR/USD Analysis
The EUR/USD pair is starting the week on a negative note, with the Euro price stabilizing around 1.1660. Recently, the US Dollar has gained strength against other major currencies, despite President Trump’s continued imposition of counter-tariffs on other global economies, which threatens the future of global economic recovery.
Overall Trend and Support Levels
The overall trend of the EUR/USD pair is beginning to show a bearish inclination. Today’s EUR/USD support levels are 1.1640, 1.1580, and 1.1500. On the other hand, the resistance levels are 1.1700, 1.1780, and 1.1840.
EUR/USD Trading Signals
Based on the current market analysis, the trading signals for EUR/USD are:
- Buy EUR/USD from the support level of 1.1570 with a target of 1.1700 and a stop loss of 1.1500.
- Sell EUR/USD from the resistance level of 1.1720 with a target of 1.1600 and a stop loss of 1.1780.
Technical Analysis
According to the daily timeframe chart, trading the EUR/USD below the 1.1620 support level would signal the beginning of a break in the bullish trend, thereby preparing for stronger bearish breakthroughs. The 14-day RSI is approaching the midline, supporting bearish control. At the same time, the MACD indicator lines are beginning to turn downward.
Impact of Tariff Fears on European Stock Prices
European stock indices closed sharply lower on Friday amid expectations of decreased global trade flows. The STOXX 50 index closed down 1.1% at 5,380 points, while the broader STOXX 600 index fell 1.1% to close at 547 points. Reports indicated that the European Commission is close to receiving a formal letter from US President Trump regarding tariffs, which imposes duties on the EU, thereby reducing demand from key foreign customers for major European companies.
ECB’s Stance on Interest Rates
A member of the European Central Bank indicated that monetary policy will not be used to counter the strength of the euro. Isabel Schnabel, a member of the European Central Bank’s Governing Council, confirmed that the bank will not resist the continued appreciation of the euro. Schnabel stated that the ceiling for any further interest rate cuts is too high, a comment that would also reinforce the euro’s appreciation trend.
Trading Advice
Monitor the strength of the current bearish shift in EUR/USD and wait for signs of strength from both bears and bulls to control the direction in the coming days. It is essential to keep an eye on the ECB’s decisions regarding interest rates, as they can significantly impact the euro’s value.
Conclusion
In conclusion, the EUR/USD pair is experiencing a bearish inclination, with the euro price stabilizing around 1.1660. The current market analysis suggests that the pair may break the bullish trend, leading to stronger bearish breakthroughs. The ECB’s stance on interest rates and the impact of tariff fears on European stock prices are crucial factors to consider when making trading decisions. As the market continues to evolve, it is essential to stay informed and adapt to the changing trends and signals.