EUR/USD Current price: 1.0490
- US President Donald Trump said he “will go forward” with tariffs on neighbour countries.
- Easing government bond yields limit US Dollar strength in a risk-averse environment.
- EUR/USD struggling to regain the 1.0500 mark, buyers are not yet convinced.
The EUR/USD pair seesaws inside a limited range and around the 1.0470 mark, unable to attract speculative interest on Tuesday.
United States (US) President Donald Trump’s administration revived market worries after announcing tariffs on Mexico and Canada “will go forward” after a one-month planned delay. Headlines also indicated plans to toughen restrictions on China, all of which put pressure on Asian indexes. Tech-related shares remain under pressure ahead of the Wall Street opening, with chip-makers leading the slide.
Other than that, and despite the ongoing risk aversion, US Dollar (USD) gains remain limited amid falling government bond yields. The 10-year Treasury bond advanced in early trading, now offering 4.31%, down 7 basis points (bps) in the day.
Meanwhile, the better performance of European equities helped the EUR, which anyway remains below the upper end of its recent range.
Data-wise, Germany released the second estimate of the Q4 Gross Domestic Product (GDP), which was confirmed at -0.2% quarter-on-quarter (QoQ). The Eurozone (EU) released Negotiated Wage Rates for the same period, which rose 4.12% after falling by 5.43% in the previous quarter.
The American session will bring February CB Consumer Prices and a couple of regional manufacturing indexes. Additionally, several Federal Reserve (Fed) officials will be on the wires and may hint at future monetary policy actions.
EUR/USD short-term technical outlook
From a technical point of view, the daily chart for the EUR/USD pair shows it remains trapped below a bearish 100 Simple Moving Average (SMA), providing resistance at around 1.0540, while above a flat 20 SMA acting as dynamic support in the 1.0400 region. Technical indicators, in the meantime, hold directionless within positive levels, limiting the risk of a steeper decline.
In the near term, and according to the 4-hour chart, EUR/USD is neutral-to-bullish. The pair is overcoming a mildly bullish 20 SMA, which advances well above flat 100 and 200 SMAs. Finally, technical indicators turned marginally higher but not far from their midlines, somehow suggesting the absence of buying convictions.
Support levels: 1.0440 1.0400 1.0360
Resistance levels: 1.0540 1.0585 1.0620
