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14/04/25
50
EUR/USD Surges Toward 1.1400 Amid Easing Trade Tensions and Fed Policy Expectations
The EUR/USD currency pair opened the week showing signs of strength, trading close to the 1.1400 level on Monday. After a significant surge of over 3.5% the previous week, the pair had reached levels not seen in more than three years, crossing the 1.1470 threshold on Friday. Following a technical adjustment as the weekend approached, the pair demonstrated resilience by regaining upward momentum.
The prevailing market sentiment is bolstered by easing trade tensions between the United States and China, although the US Dollar is struggling to attract new buyers. The US administration recently announced exemptions for certain technology imports, including smartphones and computers, from additional tariffs initially imposed on China. This includes a substantial 125% tariff, though these products will still incur a pre-existing 20% tariff related to the fentanyl crisis.
Additionally, there are forecasts of new tariffs on technology imports and semiconductors expected in the coming months, reflecting ongoing concerns about trade relations. This shift in economic outlook has positively influenced US stock index futures, which have risen by approximately 0.9% to 1.8% during the European morning session.
However, the economic calendar for the day lacks major data releases, shifting focus to speeches from various Federal Reserve policymakers later in the American session. Current market expectations, according to recent assessments, indicate only a 20% likelihood of a 25 basis point reduction in the Fed’s interest rate during the upcoming May meeting. If Fed officials advocate for maintaining a cautious stance on policy adjustments, this could provide the US Dollar with the stability it needs to mitigate further advances in EUR/USD.
From a technical perspective, should EUR/USD maintain stability above 1.1400, it may encounter resistance at 1.1470 and subsequently at 1.1500. Conversely, if the pair begins to lose ground, initial support levels can be found around 1.1340, followed by 1.1300 and 1.1250.
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