EUR/USD Analysis: New Opportunity to Break the 1.10 Psychological Peak – 03 April 2025

-- Since the start of Thursday's trading session, the EUR/USD pair has been in a strong upward rebound, with gains reaching the 1.0989 resistance level.
-- This is the closest point to breaking the psychological resistance of 1.1000, which supports the strength of the EUR/USD pair's bullish shift.
-- The pair's gains increased even with US President Donald Trump imposing 20% tariffs on all imports from the European Union.
-- The currency also benefited from the weakening US dollar, as this tariff move represents a significant escalation in the global trade dispute and raises concerns about economic growth.
Meanwhile, recent economic data showed that the eurozone inflation rate fell to 2.2% in March, its lowest level since November 2024. Core inflation fell more than expected to 2.4%, its lowest level since January 2022. With easing inflationary pressures and escalating global trade tensions, market expectations have strengthened that the European Central Bank could cut interest rates by 65 basis points this year.

European Inflation Figures

According to economic calendar data, Eurostat reported a slight decrease in the Eurozone's annual inflation rate to 2.2% in March, from 2.3% in February, meeting expectations and approaching the ECB's target of 2%. Economists say, "Eurozone inflation is easing as expected and is likely to fall below the ECB's 2% target in the coming months."

Encouragingly for the central bank, the eurozone's core inflation gauge fell to 2.4% in March, from 2.6% in February, below the consensus forecast of 2.5%. Services inflation also fell to 3.4% from 3.7%, according to the announcement.

The European Central Bank is scheduled to announce its next interest rate decision on April 17, and market expectations now indicate a 72% chance of a rate cut. By then, the extent of the upcoming US tariffs will become clearer, as will any adjustments the White House may make. By the April meeting, the ECB will also learn the nature and scope of the eurozone's countervailing tariffs, which will impact European import prices.

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Trading Tips:

We still recommend selling the euro against the US dollar from every rising level, but without risk and monitoring the factors affecting prices.

European Stocks Decline After New US Tariffs

According to yesterday's trading session and across stock trading platforms, European markets closed lower as investors braced for new US trade tariffs. According to trading, the Stoxx 50 index fell 0.4%, and the Stoxx 600 index lost 0.6%, reversing Tuesday's rebound.

According to performance, most sectors declined, with healthcare stocks being the hardest hit – falling about 2% – amid fading hopes for tariff exemptions. Bayer shares fell about 4%, leading the declines. Overall, concerns increased after Trump reiterated that his "reciprocal tariffs" would apply to "all countries." Reports indicate that 20% tariffs will be imposed on most imports, but final details remain uncertain.

Meanwhile, the White House confirmed that the measures will take effect immediately upon their announcement. Further escalating trade tensions, the United States is set to impose a 25% tariff on foreign-made cars. Meanwhile, UniCredit has received approval for its bid to acquire Banco BPM, and Credit Agricole has received approval from the European Central Bank to increase its stake in the Italian bank.

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EUR/USD Technical Analysis Today:

According to the daily chart performance, the EUR/USD pair has an opportunity for a bullish shift, and as I mentioned before, the psychological resistance of 1.1000 will remain the most prominent for this shift, which may technically push the pair towards stronger peaks. I see these peaks as potential selling opportunities for the EUR/USD, but without risk, regardless of the strength of trading opportunities. Markets are now reacting to Trump's tariffs, and attention will then turn to US jobs data tomorrow.

Conversely, over the same timeframe, the 1.0800 support level will remain a real threat to any upward shift in the EUR/USD pair.

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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.