- The EUR/USD price analysis shows renewed optimism about a likely ceasefire deal to end the Ukraine war.
- Trump’s tariff on steel and aluminum came into effect on Wednesday.
- Market participants are looking forward to US inflation figures.
The EUR/USD price analysis shows renewed optimism of a likely ceasefire deal to end the Ukraine war that has boosted the euro. On the other hand, the dollar remained weak amid recession worries. Trump’s 25% tariff on steel and aluminum goods came into effect on Wednesday, putting a lid on euro gains.
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Reports that Ukraine is ready to accept a ceasefire deal with Russia increased demand for the euro. For weeks, the US has tried to bring the two countries together in an agreement to end the war. A ceasefire will be another event that will improve the outlook for the Eurozone economy.
Last week, Germany announced a euro fund for infrastructure and security that has propelled the euro. Increased spending will not only be good for the economy but also reheat inflation.
On the other hand, the dollar was frail as yet another Trump tariff came into effect on Wednesday. The 25% tariff on steel and aluminum imports will affect many economies, including the Eurozone. Moreover, the Eurozone imposed counter-tariffs that will also hurt the US economy. Trade wars between the US and its partners have raised the risk of a recession.
Meanwhile, market participants are looking forward to US inflation figures, which will shape the outlook for Fed rate cuts.
EUR/USD key events today
- US Core CPI m/m
- US CPI m/m
- US CPI y/y
EUR/USD technical price analysis: Rally slows down around 1.09
On the technical side, the EUR/USD price has continued higher, puncturing the 1.0901 resistance level. The price trades above the 30-SMA with the RSI near the overbought region. Therefore, the bullish bias is strong.
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However, when the price broke above 1.0901, it made small-bodied candles with a large wick. This shows the rejection of higher prices. At the same time, while the price made higher highs, the RSI fell, indicating a bearish divergence. Bears might return for a deep pullback or a reversal if bullish momentum is fading.
This means the price will likely break below the 30-SMA to retest the 1.0701 support level. The trend will reverse if the price starts making lower highs and lows. Otherwise, bulls will return to seek a new high above 1.0901.
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