EUR/USD Retreats After Hitting Multi-Year Highs Above 1.1100 Amid Trump Tariff Shock

EUR/USD Forecast & Market Update – April 4, 2025

The EUR/USD pair surged to a multi-year high near 1.1150 during Thursday’s European session but faced a strong pullback, settling just above the 1.1000 psychological level. This movement came in response to widespread U.S. dollar weakness following aggressive tariff announcements by U.S. President Donald Trump on “Liberation Day.”

Despite the retreat, the Euro is still holding solid gains, with market sentiment tilted against the U.S. dollar amid growing concerns over escalating trade tensions and the broader impact on global economic growth.

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Technical Outlook: EUR/USD Price Levels to Watch

• Current Price: 1.1100
• Immediate Resistance: 1.1100 (round level, static resistance)
• Next Resistance: 1.1150 (multi-year high)
• Key Support: 1.1000 (static, former resistance turned support)
• Further Support Levels: 1.0950 and 1.0900

The Relative Strength Index (RSI) on the 4-hour chart has climbed toward 80, suggesting overbought conditions and signaling a potential short-term pullback. If EUR/USD fails to hold above 1.1000, it may retrace toward 1.0950 or even 1.0900.

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Trump Tariffs Trigger USD Sell-Off, Boosting the Euro

President Trump’s latest announcement rocked the markets:

• A 10% blanket tariff on all U.S. imports will take effect April 5.
• Additional “reciprocal” tariffs targeting around 60 countries, including the European Union, will follow on April 9, with EU goods facing 20% tariffs.

These measures have raised concerns over a new wave of global trade wars, fueling investor fears about the economic fallout. The USD Index (DXY) plunged by 1.4%, reflecting broad weakness against major currencies.

European Commission President Ursula von der Leyen responded by warning that the U.S. tariff plan would be “a major blow to the global economy” and vowed that the EU is preparing retaliatory measures.

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Upcoming Economic Events: Focus on Trade, Not Data

While upcoming U.S. data includes:

• Initial Jobless Claims
• ISM Services PMI (March)

Traders are unlikely to focus heavily on these figures as the spotlight remains on tariff headlines and geopolitical developments.

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EUR/USD Forecast Summary: Short-Term Correction Possible, Long-Term Trend Bullish

The Euro’s rally may pause in the short term due to overbought conditions, but the longer-term outlook remains bullish as investors ditch the U.S. dollar amid tariff-driven uncertainty. A sustained move above 1.1100 could open the door to 1.1200, while a drop below 1.1000 could trigger deeper correction toward 1.0950.

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