Current Situation:
EUR/USD spiked to 1.10 levels(up sharply) following Trump’s tariff announcement, defying initial expectations of short-term USD strength. This suggests markets are pricing in long-term risks to the USD (growth fears, retaliatory tariffs) faster than anticipated.
Key Drivers Behind the Move:
1. Tariff Backfire Risk: Investors may fear tariffs will hurt U.S. growth more than Europe’s, weakening the USD.
2. ECB vs. Fed Policy Shift: Bets that the **Fed could cut rates sooner** if tariffs slow U.S. inflation/growth, while the ECB delays cuts.
3. Retaliation Bets: Expectations of aggressive EU countermeasures (e.g., tariffs on U.S. tech/agriculture) boosting EUR sentiment.
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Technical Analysis (EUR/USD Daily Chart)
- ✅ Breakout Confirmed : Price surged till 2024's resistance, now testing 1.10 levels (psychological levels).
- RSI: Overbought, suggesting short-term pullback risk.
#EURUSD #TrumpTariffs #ForexTrading #Breakout #USDweakness
EUR/USD spiked to 1.10 levels(up sharply) following Trump’s tariff announcement, defying initial expectations of short-term USD strength. This suggests markets are pricing in long-term risks to the USD (growth fears, retaliatory tariffs) faster than anticipated.
Key Drivers Behind the Move:
1. Tariff Backfire Risk: Investors may fear tariffs will hurt U.S. growth more than Europe’s, weakening the USD.
2. ECB vs. Fed Policy Shift: Bets that the **Fed could cut rates sooner** if tariffs slow U.S. inflation/growth, while the ECB delays cuts.
3. Retaliation Bets: Expectations of aggressive EU countermeasures (e.g., tariffs on U.S. tech/agriculture) boosting EUR sentiment.
---
Technical Analysis (EUR/USD Daily Chart)
- ✅ Breakout Confirmed : Price surged till 2024's resistance, now testing 1.10 levels (psychological levels).
- RSI: Overbought, suggesting short-term pullback risk.
#EURUSD #TrumpTariffs #ForexTrading #Breakout #USDweakness
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.