The EUR/USD pair faced fresh selling pressure during the session on Wednesday, pulling back toward the 1.1355 area. The move comes as the U.S. dollar regains traction, supported by a renewed wave of investor confidence in the greenback following developments on both the monetary policy and trade fronts.
U.S. President Donald Trump helped calm investor nerves by clarifying that he has no plans to dismiss Federal Reserve Chair Jerome Powell, despite expressing dissatisfaction with the Fed’s reluctance to lower interest rates more aggressively. His reassurance contributed to a rebound in the dollar after recent weakness.
Adding to the dollar’s strength were upbeat comments from the White House regarding ongoing trade negotiations. On Tuesday, Press Secretary Karoline Leavitt stated that 18 countries have submitted trade proposals to the U.S., and meetings are underway with 34 nations to explore potential agreements. These positive signals around global trade talks—especially after the earlier sweeping tariffs announced by Trump—further boosted confidence in the dollar and added downward pressure on the EUR/USD pair.
Meanwhile, hawkish tones from Federal Reserve officials continue to provide additional support for the USD. Fed Governor Adriana Kugler emphasized on Tuesday that the recent surge in import tariffs is likely to drive inflation higher, reinforcing the need for the Fed to maintain its current interest rate levels until inflationary risks subside.
Euro Pressured by Dovish ECB Outlook
On the European side, expectations are rising that the European Central Bank (ECB) could implement another rate cut as early as its June meeting. According to LSEG data, market pricing for a June rate reduction has climbed to nearly 75%, up from about 60% prior to the ECB’s recent decision. This dovish shift continues to weigh on the shared currency, limiting the EUR/USD’s ability to maintain upward momentum.
Key Data Ahead
Market participants now turn their attention to Wednesday’s release of the preliminary HCOB Purchasing Managers’ Index (PMI) data for April from both the Eurozone and Germany. On the U.S. side, the flash S&P Global Manufacturing and Services PMIs will also be closely watched for clues about the health of the U.S. economy.
EUR/USD Daily Technical Analysis for April 23rd
Despite the latest dip, the broader trend for EUR/USD remains bullish. The recent break above the 1.1550 resistance level underscores the strength of the upward move and signals continued control by the bulls.
The 14-day Relative Strength Index (RSI) remains stable above the 70 mark, indicating strong bullish momentum and a sustained overbought condition.
The MACD and Stochastic indicators also remain in overbought territory, reinforcing the likelihood of short-term consolidation or profit-taking but not signaling a trend reversal—unless the U.S. dollar stages a more decisive comeback.
Should PMI figures from the Eurozone—particularly Germany—beat expectations, the EUR/USD pair may regain positive momentum, potentially targeting a breakout above the next psychological resistance at 1.1600. Additional upside could be driven by escalating tensions between President Trump and Fed Chair Powell, as well as any deterioration in trade relations.
Conversely, meaningful progress in U.S. trade negotiations—particularly with the Eurozone or China—could provide fresh support for the dollar, prompting renewed profit-taking and potentially dragging EUR/USD lower. While short-term corrections are possible, any downside moves are likely to be contained unless key macro drivers shift significantly.
These factors largely offset the moderate tone of the European Central Bank (ECB), which last week cut its interest rate for the seventh time in a year. In addition, the ECB warned that economic growth could be seriously affected by US tariffs, leaving the door open for more stimulus in the coming months. Despite this, the euro remained firm, supported by the weak dollar and reduced liquidity due to the Easter holiday on Monday.
Focus on Upcoming Data and Speeches
This week, markets will be watching for statements from ECB President Christine Lagarde on Tuesday, as well as speeches from several key members of the Federal Open Market Committee (FOMC). In addition, the release of preliminary PMI indices will be a key data point that could offer further signals on global economic health, with the potential to impact both the dollar and the euro.
Despite external uncertainty, the fundamental backdrop remains favorable for the euro, and any technical pullback could be seen as a buying opportunity by investors.
EUR/USD Daily Technical Analysis for April 21th:
From a technical perspective, the EUR/USD remains clearly bullish. The break above resistance at 1.1473 (April 11 high) has opened the way towards the psychological threshold of 1.1500, with the next relevant resistance located at 1.1498, the high recorded in February 2022. A sustained break above this level could pave the way for more ambitious targets around 1.1530 and 1.1575.
On the downside, initial support is found at the 200-day simple moving average (SMA 200) around 1.0756, followed by the March 27 low at 1.0732, close to the 55-day SMA, which could provide an important technical support zone in case of corrections.
Momentum indicators reinforce the positive outlook: the Relative Strength Index (RSI) is hovering around 71, just above the overbought threshold, reflecting strong buying pressure, although it also suggests the possibility of a pause or pullback in the short term. Meanwhile, the Average Directional Index (ADX) above 47 indicates a solid trend in development.
