EURUSD opened at 1.07940 on Wednesday, following losses from the previous day. The currencies are trading in a narrow range. Traders are adopting a wait-and-see approach ahead of the announcement of details regarding President Trump’s tariff plans, scheduled for April 2nd.
Economic indicators from the US point to increasing risks for the economy. Manufacturing output contracted in March, and the Purchasing Managers’ Index for the manufacturing sector also declined. The Labor Department report further signaled weaker demand for labor amidst trade uncertainty. Economists surveyed by Bloomberg have significantly reduced growth forecasts for the US economy, anticipating a slowdown in consumer spending and investment activity.
In the eurozone, the situation appears more stable concerning inflation, which fell to 2.2% year-on-year in March, moving closer to the ECB’s target. However, external factors, including US tariff policy, are raising concerns about a potential new round of price pressure. Bloomberg Chief Economist Jamie Rush notes that the current slowdown in inflation creates preconditions for further ECB rate cuts, although the regulator’s decision remains uncertain due to trade risks.
Trump’s imposition of tariffs on EU goods is likely to weaken the EUR against the USD due to reduced competitiveness of European exports and slower economic growth in the eurozone. Concurrently, the USD may temporarily strengthen. However, the situation could also be affected by the EU’s retaliatory measures.
On 02.04.2025, the Stochastic oscillator indicates a moderately upward trend. This is confirmed by the position of the %K line being above the %D line, signaling the current dominance of buyers. Both lines are below the overbought level, suggesting potential for further upward movement. Nevertheless, the distance between the lines is decreasing, which may signal an imminent trend reversal to bearish.
The MACD indicator also suggests the presence of an uptrend, but there is a slowdown in its development. The MACD line is beginning to show signs of declining, and the difference between it and the signal line is gradually shrinking. This further supports the possibility of a trend reversal in the near future.
Current recommendation:
Sell at the current price. Take profit – 1.06. Stop loss – 1.09.
