- The EUR/USD price analysis is positive despite a pullback.
- Tariffs weaken the US dollar as fear of recession grows.
- Traders brace for US NFP data ahead.
The EUR/USD price analysis indicates a positive trajectory for the third consecutive day, with the pair remaining above the 1.1060 area during the early European session. The global economic outlook, combined with broader dollar weakness, supports the shared currency. Traders are eyeing US NFP data ahead.
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The pair pared off yesterday’s gains partially after Germany’s factory orders missed the forecast and fell to 0% against the expected 3.5%.
US President Trump announced 10% baseline tariffs on all imports and a 20% levy on goods from the European Union. These tariffs are set to take effect on April 9, fueling fears of a renewed global war. This could result in a weaker dollar and a stronger yen, making the dollar a safe-haven asset.
ADB Chief Economist Albert Park warned about the potential magnitude of new tariffs, which could increase the likelihood of a global recession. Park noted that current measures may push the Fed to cut rates soon.
“Instead of production shifting to countries like Vietnam or Laos, these tariffs might shrink total East Asian export opportunities,” Park said. China, in particular, faces the heaviest hit with a combined 54% tariff on exports to the US, threatening its 5% growth target for the year. In response, Beijing is expected to focus more on domestic consumption and expand trade ties beyond the United States.
Meanwhile, Southeast Asian economies, facing steep tariff barriers, could struggle to absorb trade redirected from China. Park also flagged potential capital outflows from the region as global investors grow wary of rising geopolitical and economic risks.
Back in Europe, concerns over slowing growth were also building up. Markets have sharply increased bets on a European Central Bank (ECB) rate cut in April, with money markets pricing in an 80% chance of a 25-basis-point reduction. While the USD’s weakness is currently propping up EUR/USD, the rising likelihood of the ECB easing may cap further gains for the euro.
With the ECB and Fed facing mounting pressure to respond to the economic fallout from US trade actions, today’s jobs data could prove pivotal in shaping the next leg for EUR/USD.
EUR/USD technical price analysis: Bulls retreat from overbought zone
The EUR/USD price retreats from the multi-month top above 1.1100. The 4-hour chart shows two consecutive bearish pin bars, indicating a pause in the bullish momentum. However, the price is well above the pivot point at 1.1000. Breaking below the 1.1000 area may trigger a sharp sell-off, targeting 1.0920 ahead of 1.0880.
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The RSI value shows a retreat from the overbought area, while the 30-period SMA is too far from the reach of sellers.
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