The euro strengthened sharply against the US dollar on Monday, reclaiming the 1.1000 handle for the first time in over a week. The move followed a broad US dollar sell-off sparked by growing fears of stagflation and economic headwinds triggered by fresh tariff measures from the Trump administration.
On Thursday, the US Dollar Index (DXY) dropped over 1.5%, its steepest single-day decline since early 2023, as risk sentiment soured and investors moved out of the greenback. Market participants are increasingly concerned that higher import costs could squeeze consumers and weigh on growth, even as inflation remains sticky.
The EUR/USD pair hit a high of 1.1150 last Thursday—its strongest level since late September—before paring gains and settling around the psychologically important 1.1000 mark. Traders are now looking ahead to key economic data from both the Eurozone and the United States to assess the next move.
Key Economic Events Ahead
Two major data releases are likely to influence EUR/USD direction in the near term:
- Eurozone Sentix Index & Retail Sales: Monday’s releases will offer insight into consumer sentiment and spending trends in the EU, potentially supporting the euro if numbers beat expectations.
- US Nonfarm Payrolls (NFP): The March report, due later Monday, is forecast to show a job gain of 135,000. A softer print below 100,000 could deepen the USD’s losses, while a surprise upside (above 160,000) may stabilize the currency.
Investors will also tune in to Federal Reserve Chair Jerome Powell’s speech at a journalism industry event. Powell is expected to address the inflationary risks tied to tariffs. Any dovish tone or hints at rate cuts could further pressure the USD.
EUR/USD Technical Picture
From a technical perspective, the pair remains at a critical juncture:
Support Levels
- 1.0950 – Horizontal support
- 1.0900 – 20-period Simple Moving Average (SMA)
- 1.0855 – 100-period SMA
Resistance Levels
- 1.1100 – Static resistance
- 1.1150 – Multi-month high
Although the Relative Strength Index (RSI) on the 4-hour chart has dipped to 60, it still signals underlying bullish momentum. A firm break above 1.1100 could open the door to further upside, while failure to hold 1.1000 may shift the bias in favor of sellers.
In Summary:
The EUR/USD rally underscores the market’s growing unease over US macro risks and potential Fed policy shifts. With key data and speeches lined up, volatility is likely to stay elevated in the near term.