Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.1560.
- Add a stop-loss at 1.1250.
- Timeline: 1-3 days.
Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.1250.
- Add a stop-loss at 1.1500.
" rel="nofollow" target="_blank">The EUR/USD exchange rate continued rising this week after Donald Trump announced an extension to his tariffs from January 1 to July 9 as the two regions continue their negotiations. The pair rose to 1.1420, the highest level since April 22, and 2.90% above the lowest level this month.
EU scores tariff extension
The EUR/USD exchange rate continued its uptrend as the US dollar sell-off accelerated following Trump’s decision to pause his recently announced tariffs on European goods.
Trump said that the new 50% tariffs on EU goods will start being implemented on July 9 if the two sides won’t have a deal by then. He softened his mind after talking to Urusla von der Leyen, the EU president, and Giorgia Meloni of Italy.
An extended trade war between the two sides would have a major impact on the respective economies. That’s because the two are highly interconnected, doing annual business worth over $1.6 trillion.
Tariffs would also hurt top companies, especially Boeing, which counts Ryanair as the biggest customer. Ryanair has warned that a higher tariff than it pays now would push it to switch strategy and cancel orders worth over $33 billion.
The EUR/USD pair also rose after Neel Kashkari, the head of the Mineapolis Fed, said that he was unsure about the Federal Reserve’s direction on interest rates. He cited the changing policy statements from the United States under the Trump administration.
Kashkari warned that these policies were leading to lower consumer and business confidence, which will affect the recovery.
The next data to watch today, May 27, will be the US consumer confidence by the Conference Board. That report wil provide more information about the health of the American consumer.
EUR/USD technical analysis
The EUR/USD pair jumped to a high of 1.1415, its highest point on April 29. It has moved above the crucial support level at 1.1213, the upper side of the cup and handle pattern that formed between September 25 and April this year. It is now forming the handle section, which is usually the final stage before an asset rebounds.
The pair remains above the 50-day moving average, which has provided it with substantial support. Top oscillators, like the Relative Strength Index (RSI) have continued rising this week.
Therefore, the pair will likely keep rising as bulls target the year-to-date high of 1.1568, up by 1.655 from the current level.
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