EUR/USD Pressured by Stronger Dollar, Tariff Concerns Weigh on Sentiment
EUR/USD remains under pressure, trading at the lower end of its 1.0473-1.0492 range as the U.S. dollar continues to strengthen. The announcement of tariffs on EU imports by former U.S. President Donald Trump has put the euro on the defensive, while the upcoming meeting between the U.S. and Ukraine to finalize a minerals deal adds further geopolitical uncertainty. The market remains cautious, as the EU has vowed a swift response to potential trade restrictions, which could weigh further on economic confidence in the region. Meanwhile, the euro has struggled to gain traction despite a neutral technical backdrop, with 5-, 10-, and 21-day moving averages offering little directional bias.
Technically, EUR/USD remains in a consolidative phase, with mixed momentum indicators and expanding Bollinger Bands suggesting increased volatility ahead. Resistance is seen at 1.0534 (2025 high) and 1.0630 (December 2024 high), levels that have repeatedly capped upside attempts. On the downside, initial support lies at this week’s 1.0453 low, followed by 1.0401 (February 19 base). Option-related flows around 1.0465/75 and 1.0525 could add further constraints to price action in the short term. A sustained break below 1.0453 would open the door to deeper losses toward 1.0400, while a move above 1.0534 could see bullish momentum build.
Looking ahead, geopolitical risks and trade policy developments will be key drivers for EUR/USD. Should the U.S. proceed with tariffs on EU imports, the euro may face further downside pressure. Additionally, any divergence between the Fed and ECB on monetary policy will be closely watched, as U.S. growth concerns could eventually tilt the Fed toward a more dovish stance. For now, the pair remains in a tight range, with risks skewed to the downside unless it can reclaim the 1.0534 resistance level.