- Trump only focused on immigration and energy on Monday.
- Trump told reporters he might be ready to impose near-term tariffs on Canada and Mexico.
- Market participants will keep a close eye on US political developments.
The EUR/USD price analysis portrays renewed bullish momentum after a slow start to Trump’s new term. The euro rallied in the previous session after the new administration failed to give any clues on its tariff plans. However, the pair pulled back slightly when Trump later signaled near-term tariffs on Canada and Mexico.
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Traders had waited for Trump’s inauguration speech with anticipation. They were waiting to see whether he would state his plans on tariffs and implement them immediately. However, the new president only focused on immigration and energy. Consequently, there was some relief for the euro, which would have suffered at the prospect of near-term tariffs.
During the campaigns, Trump proposed a 25% tariff on Canadian goods, a 60% tariff on Chinese goods, and a universal 10% tariff. Such an outcome would significantly weigh on the currencies of these countries.
However, these currencies pulled back overnight because Trump told reporters he might be ready to impose tariffs on Canada and Mexico in February. Meanwhile, he noted that the country was not ready for universal tariffs. Market participants will keep a close eye on any developments moving forward.
EUR/USD key events today
Market participants do not expect any high-impact releases from the US or the Eurozone today. Hence, they will monitor political developments in the US.
EUR/USD technical price analysis: Broken level retested
On the technical side, the EUR/USD price has pulled back to the 1.0350 support level after making a new high to confirm a bullish trend. The previous downtrend paused near the 1.0200 support level, where bulls resurfaced.
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Sentiment shifted when the price broke above the 30-SMA and the RSI broke above 50. Bulls confirmed the new trend by respecting the 30-SMA as support and making a higher high. At the same time, the price has started trading in a bullish channel with clear support and resistance trendlines.
If EUR/USD finds support at the 1.0350 level, it will bounce higher to retest the 1.0450 resistance level. However, it might fall to the 30-SMA and the channel support before rebounding. Nevertheless, the bullish bias is strong and will remain intact unless the price breaks out of the bullish channel.
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