Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.1568.
- Add a stop-loss at 1.1300.
- Timeline: 1-2 days.
Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.1300.
- Add a stop-loss at 1.1568.
The EUR/USD exchange rate remained in a tight range after a report showed that US consumer confidence plunged in April as concerns about Donald Trump’s tariffs continued. It was trading at 1.1378 on Wednesday ahead of more US and European economic numbers.
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Key economic data ahead
The EUR/USD pair wavered after a report by the Conference Board showed that consumer confidence fell from 93.9 in March to 86 in April. This decline was higher than the median estimate of 87.5.
Confidence among consumers and businesses has dropped sharplg after Donald Trump implemented his tariff policies. He has already implemented a 25% tariff on steel, aluminium, and cars.
Trump has also placed a minimum tariff of 10% on all imported goods, and a 145% on Chinese goods. These tariffs are starting to bite as companies like Shein and Temu have hiked prices by over 100%.
Another report showed that the US house price index dropped from 5% in February to 3.9% in March.
The next key macro data to watch will be the first estimate of US GDP data for the first quarter. Economists expect the data to show that the economy softened in Q1 as tariffs started to bite. The average estimate is that the GDP grew by 0.4% after expanding by 2.4% in Q4.
The US will also release the latest personal consumption expenditure (PCE) data, which is the Federal Reserve’s favorite inflation gauge. Economists see the figure coming in at 2.2%, down from the previous 2.5%.
The EUR/USD pair will also react to the upcoming European GDP and German retail and inflation data. All these numbers will have a minor role in influencing the European Central Bank when it meets in June.
EUR/USD technical analysis
The daily chart shows that the EUR/USD exchange rate has remained in a tight range this week. After rising to a high of 1.1570 last week, it has now dropped to the psychological point at 1.1400.
The pair sits above the key resistance level at 1.1213, the upper side of the cup and handle pattern. It has also moved above the 50-day moving average, and is slowly forming a bullish pennant pattern. A pennant has a tall vertical line and a symmetrical triangle, and often leads to a bullish breakout. If this happens, the initial target will be the year-to-date high of 1.1568.
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