EUR/USD price struggles at $1.044 as Trump tariff threats weigh on euro
EUR/USD dips to 1.039 amid trade tariff concerns and dollar strength.
The EUR/USD pair continues to face headwinds, drifting lower during the Asian trading session on Wednesday, January 22.
From the 1.044 resistance zone, the currency pair declined to 1.039, and it now trades at 1.0415 in the European session. Traders are closely monitoring this key resistance level, as a breakthrough could signal a significant shift in market sentiment for the euro. However, the US Dollar's strength remains a key factor influencing the outlook for EUR/USD.
U.S. President Donald Trump's recent comments about imposing tariffs on the European Union (EU) have added pressure on the euro. Trump’s statement on Tuesday that he would levy 25% tariffs against Canada, Mexico, and the EU, effective February 1, has reignited trade concerns. His rationale stems from the belief that the EU, alongside other nations, has troubling trade deficits with the U.S.
This stance, while expected to impact global trade relations, also suggests that the USD could see further strengthening as a result of Trump's protectionist policies.
EUR/USD price dynamics (December 2024-January 2025). Source: TradingView.
EUR/USD price outlook today hinges on ECB president
Technically, the EUR/USD has struggled to break the 1.044 resistance zone over the past two days. This level continues to cap any upward movement, and a decisive break above it could mark a bullish shift in the broader EUR/USD outlook. A breakthrough would signal a bullish market structure and a potential turn of the recent broader bearish trend.
Supporting this positive outlook, both the daily and 4-hour charts show that the Relative Strength Index (RSI) remains firmly in bullish territory, further indicating potential for upside momentum. If EUR/USD successfully clears the resistance at 1.044, the next target will likely be a more sustained upward trend, possibly changing the narrative for the pair from bearish to bullish. Traders should remain alert to further developments, especially the European Central Bank (ECB) President Christine Lagarde's upcoming speech later today. The outcome of these events could provide fresh direction for the currency pair, either reinforcing or countering the current technical signals.
EUR/USD surged by 1.5% on Monday, January 20th, marking the largest single-day gain since November 2023. The euro then gave back gains on Tuesday, declining by 0.7% to 1.035.
