- The EUR/USD remains firm around 1,1350 in the European session on Friday.
- The EU has paused its 25% retaliation tariffs on US products for 90 days due to the suspension of Trump tariffs.
- It is anticipated that the ECB cuts the deposit rate at its April meeting next week in the middle of the downward risks.
The EUR/USD pair remains firm about 1,1350 after retreating 1,1385, the highest level since February 2022, during the first hours of European negotiation on Friday. The euro (EUR) advances against the US dollar (USD) since the European Union (EU) announced a 90 -day break in the countermeasures against the United States (USA), a day after US President Donald Trump suspended the tariffs previously announced for dozens of countries.
However, the growing expectation of more interest rate cuts by the European Central Bank (ECB) could exert some sale pressure on the shared currency. The ECB has cut the key deposit rate six times since June 2024 and is expected to cut next week, according to 61 of 71 economists in the Reuters survey from April 7 to 9. “We hope the ECB will deliver a 25 basic points cut at the April meeting,” said Morgan Stanley economists.
Investors are prepared for the US Production Price Index (IPP) for March and the advance of feeling of the Michigan consumer, which will be published later on Friday. In addition, the president of the Bank of the Federal Reserve (FED) of St. Louis, Alberto Musalem, and the president of the New York Bank of the Fed, John Williams, are scheduled to speak. If the reports show a stronger result than expected, this could boost the dollar and limit the EUR/USD rise.
EUR/USD technical analysis
The EUR/USD is stronger in the day. The main torque maintains the bullish vibrates in the daily temporal framework, with the price remaining above the exponential (EMA) key of 100 days. However, the 14 -day relative force (RSI) index is about 75.50, indicating the RSI overcompra condition. This suggests that a consolidation or setback cannot be ruled out before positioning for any EUR/USD appreciation in the short term.
The immediate resistance level for EUR/USD is found in 1,1385, the maximum of February 17, 2022, on the way to the psychological level of 1,1400.
On the other hand, the initial support level for the main torque is located in 1,1146, the maximum of April 3. A break of this level could expose 1,1088, the minimum of April 8. Below, the next level of containment to observe is 1,0780, the minimum of April 2.
Euro Faqs
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
