EUR/USD: Rising bulls halt
The euro (EUR) dropped in the news because of uniform tariffs. Treasury Secretary Scott Bessent supports uniform duties on US imports, starting at 2.5 percent, according to FT, but Trump stated that he wants tariffs "far bigger" than 2.5 percent. This puts the tariff issue back on the table and should keep EUR bulls in check for the time being. According to OCBC's FX analysts Frances Cheung and Christopher Wong, the pair was last at 1.0428 levels.
Our house view anticipates a cut at the ECB meeting on Thursday, which is in line with the market's 25 basis point cut assumption. Recent ECB speeches have remained dovish and have indicated a measured rate cut speed without any indication of a greater rate cut magnitude. According to Stournaras, the rate decreases should be about 25 basis points each time, bringing it down to about 2% by the end of 2025 from the current 3%.
Technical outlook
Tuesday's Asian session saw the EUR/USD continue to decline after reaching the resistance at 1.05347 and the daily chart's EMA 72. The EUR/USD is now trading above the pivot zone at 1.04200; a break below this level would send the main currency pair to the support level of 1.0330.
Conversely, the key block for the Euro bulls will be the high at 1.05347; a break in this region would also see a breach in the daily EMA 72, which will see the market go to the upside.
Our house view anticipates a cut at the ECB meeting on Thursday, which is in line with the market's 25 basis point cut assumption. Recent ECB speeches have remained dovish and have indicated a measured rate cut speed without any indication of a greater rate cut magnitude. According to Stournaras, the rate decreases should be about 25 basis points each time, bringing it down to about 2% by the end of 2025 from the current 3%.
Technical outlook
Tuesday's Asian session saw the EUR/USD continue to decline after reaching the resistance at 1.05347 and the daily chart's EMA 72. The EUR/USD is now trading above the pivot zone at 1.04200; a break below this level would send the main currency pair to the support level of 1.0330.
Conversely, the key block for the Euro bulls will be the high at 1.05347; a break in this region would also see a breach in the daily EMA 72, which will see the market go to the upside.
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