- The EUR/USD weekly forecast is turning bearish due to the looming April tariffs.
- The Fed kept interest rates unchanged, as expected.
- Fed policymakers maintained the call for patience amid tariff uncertainty.
The EUR/USD weekly forecast is turning bearish as looming April tariffs threaten the outlook for major economies, including the Eurozone.
Ups and downs of EUR/USD
The euro had a bearish week as the dollar rebounded due to a cautious Fed and ahead of April’s reciprocal tariffs. However, at the start of the week, retail sales data revealed weak consumer spending in the US.
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On Wednesday, the Fed kept interest rates unchanged as expected. Moreover, policymakers projected two rate cuts this year, maintaining the previous forecast. Policymakers maintained the call for patience amid tariff uncertainty. As a result, the dollar found some support.
Meanwhile, market participants were looking forward to reciprocal tariffs starting in April. More tariffs will likely increase inflation expectations, forcing the Fed to remain cautious.
Next week’s key events for EUR/USD
Next week, market participants will focus on economic releases from the US, including durable goods orders and gross domestic product. The GDP report will show the economy’s health and influence the outlook for Fed rate cuts.
Recent data has shown a slowdown in the US economy. Therefore, there is a high chance this trend will continue with downbeat GDP data. Such an outcome would increase expectations for Fed rate cuts, weighing on the dollar.
EUR/USD weekly technical forecast: Brief pullback after sharp rally
On the technical side, the EUR/USD price is pulling back after meeting the 1.0901 resistance level. However, the bullish bias remains intact since the price is above the 22-SMA. Moreover, the RSI trades above 50, suggesting strong bullish momentum.
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Bulls took charge after a period of consolidation at the bottom of the chart. The price pushed above the 22-SMA and started making higher highs and lows. At the same time, it broke above the 1.0603 resistance and punctured the 1.0901 level.
Currently, the price is retreating to retest the 22-SMA support. After such a steep rally, bulls have temporarily given up control. However, the decline might not go past the SMA. When bulls return, EUR/USD will likely rebound to retest the 1.0901. A break above this level will make a higher high, continuing the uptrend. Additionally, it will clear the path to the 1.1200 resistance level.
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Saqib Iqbal
