The EUR/USD pair is finding it difficult to maintain its footing above the key psychological level of 1.1000 in Monday’s European session, despite underlying weakness in the US Dollar (USD). Mixed Eurozone data, including a sharp drop in Sentix Investor Confidence and stronger-than-expected retail sales, has contributed to a choppy trading tone.
📉 Eurozone Data Offers Mixed Signals
- The Eurozone Sentix Investor Confidence Index for April plunged to -19.5, signaling worsening investor sentiment across the bloc.
- On the positive side, February’s Retail Sales rose 2.3% YoY, outperforming expectations of 1.8% and offering a glimpse of consumer resilience despite macroeconomic headwinds.
This mix of data is limiting the Euro’s upside traction, even as global risk appetite weakens due to ongoing trade tensions sparked by the latest US tariff measures.
💹 EUR/USD Technical Outlook
📊 Current Price: 1.0968
🧭 Key Resistance Levels: 1.1000 → 1.1050 → 1.1100
🛡️ Support Levels: 1.0950 → 1.0880 (20-day SMA) → 1.0860 (100-period SMA)
The 4-hour RSI remains above 50, suggesting a slight bullish bias. After testing the 20-day Simple Moving Average (SMA), the pair rebounded modestly, indicating continued buyer interest. A confirmed daily close above 1.1000 could open the door toward the next resistance at 1.1050.
🇺🇸 USD Outlook: Strong NFP and Powell Comments Shake the Dollar
The US Dollar gained late last week following stronger-than-expected Nonfarm Payrolls (NFP) data and hawkish commentary from Fed Chair Jerome Powell. March’s NFP figure came in at 228,000, well above the 135,000 forecast, hinting at continued labor market strength.
Powell acknowledged that President Trump’s tariffs, which include a 10% baseline duty on all imports, pose risks of both higher inflation and slower growth. His warning that the Fed will act to prevent temporary inflation from becoming entrenched has led to increased market volatility.
Meanwhile, US Commerce Secretary Howard Lutnick reaffirmed that the tariffs will go into effect immediately and remain in place “for days and weeks,” dampening market hopes for a quick resolution.
🌍 EU Prepares Response as Trade War Fears Grow
EU Commissioner Stéphane Séjourné announced that a retaliatory product list targeting US imports is in development and will be revealed in the coming days. As recession fears mount, investors are pricing in an increasing chance of a Fed rate cut in the coming months.
According to the CME FedWatch Tool, the probability of the Fed holding rates steady in May has dropped to 30%, down from 65% before the tariff announcement.
🔎 Outlook: All Eyes on Tariffs and Fed Policy Clues
With no major US data releases scheduled for Monday, EUR/USD traders will continue to monitor:
- Further developments in the US-EU trade tensions,
- Comments from Fed officials,
- And sentiment in global equity markets.
Despite a lack of high-impact events, the sharp decline in US stock futures reflects a cautious mood, potentially limiting any USD recovery attempts in the short term.
📌 Bottom Line:
EUR/USD remains at a critical juncture around 1.1000. While stronger Eurozone retail data and a weak dollar environment offer support, persistent global trade uncertainty and Fed hawkishness could cap gains. Traders are advised to stay alert for potential breakouts as geopolitical tensions and monetary policy expectations continue to drive price action.