EUR/USD price prediction: RSI and U.S.-China tariff weigh on recovery
EUR/USD struggles at 1.04 as U.S. dollar regains strength.
The EUR/USD price opened on the first trading day of March near the 1.04 psychological level after last week’s three-day decline, which pushed the pair to a two-week low at 1.0360.
While the pair showed mild gains of 0.2% during the Asian session, the European session saw a sharp reversal, erasing those gains.
The recovery from last week’s low was influenced by a weaker U.S. dollar following the release of January’s Personal Consumption Expenditures (PCE) inflation data on Friday. The report aligned with market expectations, easing concerns about inflationary surprises in the U.S. Meanwhile, the Euro found support from stronger-than-expected German February flash Harmonized Index of Consumer Prices (HICP) data, which reinforced expectations for the upcoming Eurozone HICP inflation data later in the day.
EUR/USD pares early gains as technical resistance caps recovery
EUR/USD price dynamics (Nov 2024 - March 2025). Source: TradingView
As of now, EUR/USD trades near 1.0410, facing resistance at the 50-day EMA around 1.0435. The technical outlook remains bearish, with RSI in negative territory on both daily and 4-hour charts, indicating the potential for further downside. If the pair fails to hold above the 1.0400 psychological level, last week’s low at 1.0360 could be revisited, with further downside targeting 1.0330.
Fundamental risks also weigh on the pair. The Euro’s upside may be capped by geopolitical and trade tensions, particularly the escalating U.S.-China tariff situation. Over the weekend, U.S. President Donald Trump announced an additional 10% tariff on Chinese imports starting Tuesday, raising concerns about global trade disruptions and supporting safe-haven flows into the U.S. dollar.
Overall, EUR/USD remains at a critical juncture, balancing between resistance at 1.0435 and the downside risk of breaking below 1.04. The market’s reaction to upcoming inflation data and geopolitical developments will likely determine the pair’s next move.
Renewed U.S.-EU trade tensions have weakened the Euro, due to concerns over potential tariffs. EUR/USD dropped below 1.04, extending its bearish momentum.
