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Under the suspense of tariffs, the euro/dollar is waiting for the European Bank policy resolution
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On Tuesday (April 15), the euro/dollar showed a consolidation trend around 1.1350 during the European trading period after experiencing a significant increase last week. The dollar index (DXY) has temporarily gained breathing space since hitting a recent three-year low last week, but bearish sentiment towards the dollar still prevails.
State Analysis
The US dollar has been under pressure recently, mainly because the tariff policies announced by US President Trump have caused market concerns. In addition, concerns about the economic slowdown caused by Trump's economic policies also put pressure on the dollar, while pushing up U.S. Treasury yields. Historical data shows that in periods of economic uncertainty, the yield of interest-bearing assets will rise significantly as market participants increase their risk premiums. The yield on 10-year U.S. Treasury bonds has risen by more than 13% over the past six trading days.
A rising bond yields and increased concerns about slowing economy are expected to affect the Fed's monetary policy outlook. On Monday, Fed Director Christopher Waller warned that the "new tariff policy" was one of the "biggest shocks" that have affected the U.S. economy in decades. Waller attaches more importance to recession concerns rather than rising inflation expectations and supports monetary easing. He expects "the impact of tariffs on inflation" to be "temporary".
The euro/dollar exchange rate consolidation has also been affected by the market's cautious awaiting European Central Bank (ECB) monetary policy resolution, which will be released on Thursday. The ECB has almost determined to lower the deposit facility rate by 25 basis points to 2.25%, which may be the sixth consecutive rate cut by the ECB.
The market is following a press conference by ECB President Christina Lagarde to understand the monetary policy outlook for the rest of the year and how the new trade policy of U.S. President Trump will be impactedResonate with the euro zone economy. Several ECB officials have said inflation caused by Trump's tariffs will not continue and will lead to significant economic risks.
At a global level, analysts expect U.S. trade relations with the euro zone to be healthy. Kevin Hassett, director of the National Economic xmserving.commission (NEC), said on Monday that they have made "huge progress" in tariff negotiations with the EU.
Technical analysts interpret:
From the 120-minute chart, after breaking through the important psychological threshold of 1.1300, the euro/dollar is currently showing a consolidation trend around 1.1350. The price has undergone a short-term adjustment after experiencing a rapid rise, but it is still significantly located near MA14, indicating that the current bullish trend is still intact. The MACD indicator runs above the zero axis, but the bar chart shrinks, suggesting that short-term momentum may weaken slightly. The RSI indicator is at the 54.25 level and is in the neutral area, showing neither overbought nor oversold status. Recent support is around 1.1300, while resistance is at the 1.1420 and 1.1472 levels.
Analysis from the daily chart, the euro/dollar has formed a significant upward channel since the low of 1.0177, and has recently broken through the key resistance level of 1.1200 and has risen rapidly. The current price is at the upper level of the middle rail of the rising channel, with the daily RSI reaching 74.70, indicating that it is already in the overbought area in the short term. The MACD index has a significant golden cross and the columnar volume increases, indicating that the medium and long-term bull momentum is strong. The daily chart shows that the interim support of the exchange rate is at 1.1200 and the lower rail of the rising channel, while the resistance is at the high point of the 1.1472 and the upper rail extension line.
Previous market sentiment
Current market sentiment is obviously inclined to be bullish on the euro and the US dollar is bearish on the ground. The uncertainty of Trump's tariff policy has seriously weakened the safe-haven nature of the US dollar. At the same time, although the European Central Bank is about to cut interest rates, the market has fully absorbed this expectation. RSI and CCI indicators show that there may be overbought risks in the short term, which may lead to a technical pullback in the short term.
The readjustment of the global trade pattern is changing the flow of funds, and the market is in a strong wait-and-see mood. Institutional holdings data show that large speculators continue to increase long positions in the euro, but the growth rate has slowed down, indicating that the market is hesitant at the current price.
Future Outlook
Short-term Outlook: Euro/USD may continue to consolidate before the ECB resolution, oscillating between 1.1300-1.1420. After the European Central Bank resolution, if Lagarde releases dovish signals, it may trigger profit-taking and test support of 1.1300; if Lagarde expresses concerns about inflation and the economic outlook of the euro zone, while maintaining a cautious stance, the exchange rate may break above 1.1420, challenging the recent high of 1.1472.
Medium- and long-term outlook: The path to implementing Trump's tariff policy will be the decisive factor. If the tariff policy is finally implemented moderately, the US economy will avoid recession and the US dollar may stabilize and rebound. However, if economic data continues to deteriorate, forcing the Fed to initiate a cycle of interest rate cuts, the euro/The US dollar is expected to continue the upward channel, with the target pointing to 1.1500 or even higher. The relative stability of the eurozone economic performance will also become an important factor supporting the exchange rate.
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