The EUR/USD pair extends its losing streak for the third consecutive day on Friday, trading near 1.0390 during the Asian session. The Euro remains under pressure as renewed US-EU trade tensions weigh on market sentiment, coupled with a stronger US Dollar (USD) following upbeat economic data.
US President Donald Trump heightened market jitters by hinting at the introduction of 25% tariffs on Eurozone cars and other products as early as April, sparking fears of a trade war between the US and the European Union. In response, the European Commission (EC) warned that the EU would retaliate firmly against any unjustified trade barriers.
The trade uncertainty exacerbates the Eurozone’s fragile economic outlook, where growth remains subdued amid persistently weak demand and inflationary pressures.
US Dollar Strengthens on Positive Data
The US Dollar continues to gain ground following Thursday’s release of stronger-than-expected economic data. The US GDP Annualized figure confirmed 2.3% growth in Q4 2024, in line with market expectations. Additionally, durable goods orders jumped 3.1% in January, well above the forecasted 2% rise, boosting confidence in the resilience of the US economy.
The US Dollar Index (DXY) hovers near 107.50, its highest level in over two months, as investors await the US Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation gauge—due later on Friday. The outcome of the report could provide further cues on the Federal Reserve’s interest rate path.
Technical Outlook
EUR/USD remains firmly bearish, trading below key moving averages on the daily chart. The immediate support level is seen at 1.0350, with a break below potentially paving the way for further downside toward the 1.0300 psychological mark.
On the upside, resistance is located at 1.0450 (nine-day EMA) and 1.0500. A sustained move above these levels could signal a short-term recovery, although the broader trend remains bearish amid ongoing geopolitical risks and a stronger US Dollar.
Market participants will closely monitor US PCE inflation data and any further developments in the US-EU trade standoff for fresh trading cues.
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