EUR/USD Gains—$1.1419 in Sight on ECB Shift, USD Weakness

The EUR/USD is up today, trading around $1.1334 as the US dollar retreats after President Donald Trump’s 90-day pause on new tariffs. The delay on the 10% baseline tariff – which was set to impact dozens of countries – has added uncertainty to the markets and reduced demand for the dollar.

More pressure on the dollar comes from the Federal Reserve’s Beige Book which shows more US companies are now passing on higher costs to consumers. That’s inflation worries and doubts over the Fed’s next move as growth slows.

All eyes now on today’s US data:

• Jobless Claims: 222K (vs 215K last week)

• Core Durable Goods Orders: 0.3% (down from 0.7%)

• Existing Home Sales: 4.14M (from 4.26M)

If these numbers disappoint, it could add to the dollar’s pullback and EUR/USD momentum.

ECB Tries to Steer Clear of the Storm

The euro is also benefiting from a cautious but steady tone from the European Central Bank. Last week the ECB cut rates by 25bps to 2.25% in a move widely seen as defensive. President Christine Lagarde said US tariffs on European goods have risen to an average of 13% – up from 3% – and are weighing heavily on the eurozone’s growth outlook.

Despite the cut, Lagarde was balanced and said the ECB is focused on stability not easing. For euro bulls that’s good news.

Keep an eye on these eurozone updates:

• German Ifo Business Climate (85.1 vs 86.7 prior)

• German Buba Monthly Report

• Comments from Buba President Joachim Nagel

If business sentiment beats expectations it could support EUR/USD in the short term.

Chart Watch: Can EUR/USD hold $1.1306?

Technically, EUR/USD is consolidating after the recent move down from $1.1540. Price is testing a key support zone at $1.1306 which is also the long term trend line support. The 50-period EMA at $1.1397 is the first level of resistance.

Momentum has slowed down but the MACD histogram is flattening, so bearish momentum may be fading.

Here’s the setup:

• Entry Option 1: Buy on a bounce from $1.1306

• Entry Option 2: Buy above $1.1357 for a move to $1.1397 and $1.1419

• Stop Loss: Below $1.1262 to manage risk

Key Levels:

• Support: $1.1306, $1.1262

• Resistance: $1.1397, $1.1419

• Trend: Sideways with a bullish bias if $1.1306 holds

Conclusion

With trade policy in flux and data on the horizon, the euro is walking a tightrope between recovery and reversal. But with the ECB being cautious and the dollar being hit by noise, EUR/USD has room to grind higher – if the data doesn’t spoil the party.

As always, wait for confirmation before entering. This is a data sensitive market and momentum can change quickly.