The EUR/USD pair continues its gradual decline, erasing its recent technical rebound and retreating to 1.0795. Traders remain cautious as key economic and political developments loom.
Key Factors Driving the EUR/USD Movement
Today (2 April) marks a critical date for global markets as new US tariffs on trading partners take effect. Investors are closely watching for President Donald Trump’s final decision, which could escalate trade tensions.
Earlier, Treasury Secretary Scott Bessent hinted that these tariffs could serve as leverage, pushing partner countries to negotiate lower duties. Meanwhile, recent US economic data has added to the uncertainty:
- Manufacturing activity contracted in March (the first decline of 2025).
- Prices increased for the second consecutive month, reflecting tariff-driven inflationary pressures.
- Job openings declined in February, though layoffs remained low, indicating a potential cooling in the labour market.
Market focus now shifts to Wednesday’s ADP employment report and Friday’s Non-Farm Payrolls (NFP) data, which will shape expectations for the Fed’s next interest rate decisions.
Technical Outlook: EUR/USD
Chart Analysis
- The pair declined to 1.0784 before correcting to 1.0825
- The next likely move is a continued downward trend towards 1.0695 (first target)
- A pullback to 1.0825 (testing from below) may follow (second target)
- MACD confirmation: the signal line remains below zero, pointing sharply downward and supporting further bearish momentum
- The pair is forming the fifth leg of a downward wave, targeting 1.0695
- A short-term decline toward 1.0715 is expected today, possibly followed by a correction to 1.0772
- Stochastic oscillator confirmation: the signal line is below 50 and trending downward towards 20, reinforcing bearish momentum
Conclusion
With trade war risks resurfacing and mixed US economic signals, the EUR/USD remains under pressure. A break below 1.0695 could open the door for deeper declines, while a rebound above 1.0825 may signal temporary relief. Traders should monitor US employment data and trade policy updates for fresh directional cues.
By RoboForex Analytical Department
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.