EUR/USD fell back 0.3% on Thursday as Europe gets added to Trump’s tariff list.
Trump plans more tariffs on targeted EU goods after Europe retaliated against steel tariffs.
US consumer sentiment and inflation expectations dominate Friday’s data docket.
EUR/USD trimmed a bit more of its recent gains on Thursday, falling back around one-third of one percent as Europe gears up for a protracted back-and-forth on trade tariffs with US President Donald Trump. The Trump administration kicked off a global 25% import tax on all steel and aluminum that crosses the border into the US, sparking a wave of retaliatory tariffs from most of the US’s (formerly) closest trading partners. The EU has announced a set of tariffs on key, targeted US products, specifically Harley Davidson motorcycles and US distilled whisky, prompting an irate outburst from President Trump on Thursday.
US President Trump wants to tariff EU wine, reiterates interest in Greenland
Donald Trump threatened to impose a steep 200% tariff on all European wines and champagne via his social media account during Thursday’s early US session, sparking widespread market concerns that the Trump administration is barreling towards a disastrous outcome to its ham-handed trade policies that don’t entirely seem to serve a function or purpose. Now, the US markets pivot to Friday’s consumer confidence and inflation expectations readings, which come at a time when the average US consumer is growing increasingly concerned about the rhetoric leaking out of both the White House and Donald Trump’s social media accounts.
German Harmonized Index of Consumer Prices (HICP) inflation figures from February are due early Friday, however the final, non-preliminary figure is entirely unlikely to turn many heads. Coming up on Friday, the US data docket will close out a relatively packed week with the University of Michigan (UoM) Consumer Sentiment Index as well as UoM’s Consumer Inflation Expectations. Both figures are likely to see some negative influence from President Trump’s tariff tirades, and median market forecasts see the sentiment index declining to 63.1 for March, down from February’s 64.7. At the last print, the average consumer respondent expected 5-year inflation to clock in around 3.5%, implying inflation expectations remain entrenched well above the Federal Reserve’s (Fed) 2% target.
EUR/USD price forecast
EUR/USD looks like its recent bull run is now over, confirming a technical retreat back below 1.0900 just as quickly as it jumped the major handle in the first place. However, Fiber has climbed nearly 7.6% bottom-to-top from the last major swing low near 1.0175, with bulls easily snapping the 200-day Exponential Moving Average (EMA) in the process.
EUR/USD is now running aground of technical resistance from the 1.0900 handle, a technical region that flummoxed Euro bulls the last time around back in October and November of last year.
EUR/USD daily chart
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