EUR/USD Outlook: Dollar Gains as PMIs Calm Recession Fears

• The EUR/USD outlook points south as the dollar regains momentum.

• The US composite PMI increased from 51.6 to 53.5 in March.

• Trump said he might exempt some countries from tariffs.

The EUR/USD outlook points south as the dollar regains momentum after upbeat data eased recession worries. Notably, business activity in the US improved in March. At the same time, Trump said he might exempt some countries from tariffs starting on April 2.

–Are you interested in learning more about crypto brokers? Check our detailed guide-

Data from the previous session revealed that the US composite PMI increased from 51.6 to 53.5 in March, showing solid business activity. Most of this increase was in the services sector, where the PMI came in above estimates at 54.3. This was the first upbeat report in a while, and it boosted the dollar, leading to a decline in EUR/USD. 

Moreover, the dollar rebounded after reports showed that Trump’s tone on tariffs had softened. The US president said he might exempt some countries from the tariffs he proposed for April 2. Market participants expect tariffs on automobile imports and a 25% tariff on Canada and Mexico.

Additionally, the US might impose a reciprocal tariff on all imports to the country. The news on Trump’s softer stance eased fears of global trade wars and a US recession. However, there is still uncertainty over which countries will get this tariff relief.

EUR/USD key events today

Market participants are not expecting key releases from the US or the Eurozone today. Consequently, the price might move sideways.

EUR/USD technical outlook: Bears may sustain below 1.0800

On the technical side, the EUR/USD price has paused near the 1.0800 key support level. Moreover, the price trades below the 30-SMA, showing bears are in the lead. Meanwhile, the RSI trades below 50, indicating solid bearish momentum. 

–Are you interested in learning more about managed forex accounts? Check our detailed guide-

Sentiment shifted when the previous trend failed to go beyond the 1.0950 resistance level. Bulls started showing exhaustion when the price broke above the 1.0800 resistance level. The RSI made a bearish divergence that showed fading bullish momentum. At the same time, the price punctured the SMA, a sign that bears were getting stronger. 

Therefore, when bulls made another attempt at the 1.0950 resistance, they failed to make a higher high and instead made a double top. The RSI divergence allowed bears to take over with a break below the SMA. However, the price must break below 1.0800 to confirm a new downtrend.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.