The euro/dollar pair continues to decline on Thursday, edging closer to 1.1256 as the US dollar strengthens for a third straight session. This development follows a US federal court ruling that former President Donald Trump overstepped his authority by imposing retaliatory tariffs.
Key factors driving EUR/USD movement
The US Court of International Trade ruled that the tariffs were unlawful not only for the five companies that brought the lawsuit but also for all parties. The court ordered the immediate and permanent revocation of these tariffs, although the Trump administration is expected to appeal the decision.
Meanwhile, investors are closely monitoring debates in the US Senate over Trump’s expansive tax and budget bill, which is likely to face substantial amendments in the upper chamber.
Yesterday’s release of the Federal Reserve meeting minutes revealed a cautious, wait-and-see stance among officials. Policymakers are evaluating the economic repercussions of recent government measures and the ongoing tariff dispute, with noted concerns over rising inflation and unemployment risks.
Thursday’s market focus will shift to key economic data, including the second estimate of US Q1 GDP and the weekly US jobless claims report.
Technical analysis: EUR/USD
H4 Chart:
- The pair formed a consolidation range around 1.1313 before breaking downward to 1.1210
- A technical retracement to 1.1313 (testing from below) is anticipated today
- If the price breaks downward from this range, the downtrend could extend towards 1.1080
- Conversely, an upward breakout may signal a corrective move towards 1.1485
- The MACD indicator supports this outlook, with its signal line below zero and pointing sharply downward.
H1 Chart:
- The market completed a downward wave to 1.1313, followed by consolidation and a further drop to 1.1210 in a double-wave extension structure
- Today, a potential upside wave to 1.1260 is in play, with a possible continuation towards 1.1313
- The Stochastic oscillator aligns with this scenario, with its signal line above 50 and rising towards 80
Conclusion
The EUR/USD remains under pressure amid dollar strength and political uncertainty, with technical indicators suggesting further downside potential unless a corrective rebound materialises.
