- The EUR/USD forecast shows renewed optimism about the Eurozone economy.
- Germany announced plans to create a 500 billion euro fund.
- The dollar pulled back on Tuesday after Trump’s tariffs ignited trade wars.
The EUR/USD forecast shows renewed optimism about the Eurozone economy after Germany announced plans to revive growth. As a result, the euro gained sharply against the dollar. At the same time, the greenback suffered as the outlook for the US economy dimmed amid Trump’s trade policies.
–Are you interested in learning more about making money with forex? Check our detailed guide-
On Tuesday, Germany announced plans to create a 500 billion euro fund for infrastructure and security. At the same time, the country plans to change its borrowing rules completely. These plans have brightened the outlook for growth in the Eurozone economy, boosting the euro.
At the same time, the euro found support from a minerals deal between the US and Ukraine. Trump and Zelenskiy have had a difficult time agreeing on anything. This had dimmed hopes of a peace deal with Russia to end the war. However, the deal on Tuesday revived hopes that the two leaders could work together with Putin to end the Ukraine war with a peace deal.
Meanwhile, market participants looked forward to the European Central Bank policy meeting. Economists expect policymakers to cut rates by 25-bps.
On the other hand, the dollar pulled back on Tuesday after Trump’s tariffs ignited trade wars. These wars will negatively impact global and US growth.
EUR/USD key events today
- ADP Non-Farm Employment Change
- ISM Services PMI
EUR/USD technical forecast: Sharp rally meets the 1.0701 key level
On the technical side, the EUR/USD price has made a sharp, bullish move, breaking above the 1.0500 key resistance level. The price trades far above the 30-SMA while the RSI is overbought, indicating solid bullish momentum.
–Are you interested in learning more about MT5 brokers? Check our detailed guide-
Previously, EUR/USD had paused its rally after failing to break above the 1.0500 resistance level. Bulls made several attempts at the level but could not break above. However, after a deep pullback, the price finally broke above the resistance, rallying to the 1.0701 key level. The bullish move was so steep, leaving the SMA well below.
The bulls might need to pause after such a strong move and let the SMA catch up. In this case, the 1.0701 level acts as a strong resistance, prompting a pause or pullback. However, if bulls are still strong, EUR/USD might break past the current resistance to reach 1.0800.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
