EUR/USD Resistance Rejection on Tariff Headline
EUR/USD has now tested the 1.0500 level for each of the past five trading days. Bulls haven't exactly taken-over as they haven't been able to drive a strong breakout, but there has been a drying up of bears as each of the past five days have also brought higher-lows, which extends a sequence of higher-lows that's built in the pair so far in February.
The 25% tariff comment took many by surprise as I think it was assumed that Europe was included in the reciprocal tariff announcement two weeks ago. That is set to come into place on April 1st, and given the elongated timeline until it goes into effect, the reciprocal tariff announcement led to a bullish breakout and an eventual push up to the 1.0500 handle.
At this point, there's still an open door for bulls but they'll need to act relatively fast, as higher-low supports at 1.0457 and 1.0407 would need to be respected to keep the bullish sequence alive. The big data item for this week out of the U.S. is the Core PCE report on Friday morning, and if there is a below-expected print, that could lead to both USD-weakness and a faster timeline for rate cut expectations. - js
The 25% tariff comment took many by surprise as I think it was assumed that Europe was included in the reciprocal tariff announcement two weeks ago. That is set to come into place on April 1st, and given the elongated timeline until it goes into effect, the reciprocal tariff announcement led to a bullish breakout and an eventual push up to the 1.0500 handle.
At this point, there's still an open door for bulls but they'll need to act relatively fast, as higher-low supports at 1.0457 and 1.0407 would need to be respected to keep the bullish sequence alive. The big data item for this week out of the U.S. is the Core PCE report on Friday morning, and if there is a below-expected print, that could lead to both USD-weakness and a faster timeline for rate cut expectations. - js
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