- EUR/USD is on multi-day losing streak amidst uncertainty surrounding new US tariffs, despite positive German data.
- Mixed US economic data, including declining consumer confidence, added to market volatility.
- Upcoming US economic releases, particularly the Core PCE report, may be crucial in determining the future direction of EUR/USD.
EUR/USD has been on a four-day losing streak with the battle between bears and bulls still ongoing. The only positive at present is that bears appear to be running out of steam but bulls have so far failed to capitalize.
Today, President Trump announced that new tariffs on car imports will be revealed soon, but hinted some countries might get exemptions from next week’s “reciprocal” tariffs.
This has created uncertainty around tariffs, leaving the short-term EUR/USD outlook unclear.
However, there remain reasons for optimism about the pair due to Germany’s historic fiscal changes approved last week and recent mixed U.S. economic data.
German Data Surprises
Earlier in the day EUR/USD rose above the 1.0800 handle thanks in part to some positive German data.
Germany’s Ifo Business Climate indicator rose to 86.7 in March 2025, the highest since July, meeting market expectations.
Business confidence improved as companies became more optimistic about the future (87.7 vs. 85.6 in February), boosted by a historic debt deal to increase defense spending, relax strict rules, and create a large infrastructure fund. Firms also had a better view of the current business situation (85.7 vs. 85.0). Sentiment improved across all sectors as well.
Mixed US Data Continues
US data continues to send mixed signals and underwhelm as consumer confidence data fell short and recorded its fourth successive month of declines. U.S. consumer sentiment continued to drop in March, with the Conference Board’s Consumer Confidence Index falling from 98.3 to 92.9, the lowest level since February 2021.
Sales of new single-family homes in the U.S. increased by 1.8% in February 2025 to an annual rate of 676,000, bouncing back slightly from a 6.9% drop in January but missing the expected 680,000.
Sales are likely to stay under pressure due to ongoing economic uncertainty, adding further pressure on US data which has underwhelmed in recent weeks.
The Week Ahead
The key focus is Durable Goods Orders, while Thursday will feature Unemployment Claims, the Final Q4 GDP estimate, and Pending Home Sales.
However, the big event is Friday’s Core PCE report. As the Fed’s favorite inflation measure, a steady +0.3% monthly increase could raise the yearly rate to 2.7% from 2.6%, challenging Powell’s view that inflation is under control and no doubt reigniting the ‘transitory’ jokes by market participants.
Technical Analysis on EUR/USD
Looking at the EUR/USD daily chart, the pair is on course for a fifth successive day of declines.
However, yesterday’s and today’s daily candles closed bearish after attempts at a rebound. This is a clear sign that bullish pressure remains in play.
This is not surprising given that the US Dollar Index has been eyeing a retracement with some strength yesterday. For more on the DXY, please read Navigating the US Dollar (DXY): Tariffs, Data, and Technicals.
Despite the data, the pair is likely to be driven by tariff developments and their impact on market sentiment in the coming days.
There does appear to be a pennant pattern in play on EUR/USD which hints at a bullish breakout and move higher. This could be used in conjunction with the period 14 RSI which is approaching the neutral 50 level. A bounce off here may embolden bulls and give EUR/USD the push it needs to run toward the 1.1000 handle.
Source: TradingView
Support
- 1.0755
- 1.0700
- 1.0600
Resistance
- 1.0840
- 1.0904
- 1.0948