The EUR/USD pair remained rangebound near the 1.0800 level on Tuesday, as investors braced for US President Donald Trump’s long-anticipated “reciprocal” tariff package, set to be unveiled on Wednesday at 19:00 GMT (4:00 PM EST). The exact details of Trump’s proposed tariffs remain uncertain, with the possibility of last-minute changes or even delays, a pattern he has followed four times in his 71 days in office.
According to a report from The Wall Street Journal on Tuesday, the United States Trade Representative Office is considering presenting an alternative tariff proposal to Trump. The move aims to streamline and mitigate the complexities of his multiple tariff threats, which have been piling up over the past few months.
Economic Data and Market Reactions
In the Eurozone, inflation figures for March met expectations, offering no surprises to the market. Meanwhile, in the US, the ISM Manufacturing PMI for March fell more sharply than expected, dropping to 49.0 from 50.3. This decline suggests a contraction in the sector, as businesses brace for the expected tariff announcements. Market forecasts had anticipated a reading of at least 49.5. The ISM Manufacturing New Orders Index also posted a significant drop, hitting a two-year low of 45.2.
European economic data is expected to remain relatively subdued for the rest of the trading week. However, traders will likely be more focused on the fallout from Trump’s tariff decisions. A key economic event to watch will be the US Nonfarm Payrolls (NFP) report set for release on Friday. Given the uncertain trade landscape, March’s labor data will serve as a crucial indicator of how tariffs might impact the US economy going forward.
EUR/USD Technical Outlook
From a technical standpoint, EUR/USD remains trapped within a tight trading range. Buyers have been unable to drive the pair meaningfully higher, while downside momentum has been insufficient to push prices below the 200-day Exponential Moving Average (EMA), which sits just below the 1.0700 level.
The pair managed to break a near-term losing streak, bringing technical indicators into oversold territory. However, a sustained recovery remains uncertain as geopolitical risks take center stage. With traders largely focused on tariff-related developments, EUR/USD is likely to remain volatile but directionless until clearer signals emerge from the US administration.
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