EUR/USD Price Forecast: Extra gains need to clear 1.0950

EUR/USD rose for a second straight day on Monday, extending its rebound north of 1.0900 amid the US Dollar’s (USD) intense decline. In fact, the pair flirted with multi-day peaks, while the US Dollar Index (DXY) slipped back to the area of multi-month lows in the 103.30-103.20 band amid a mixed tone in US yields across the curve and a decline in Germany’s 10-year bund yields.

Trade tensions rattle Dollar confidence

Lingering trade concerns remain front and centre, fuelled by President Trump’s ever-shifting stance on tariffs. Canada and Mexico have received a temporary extension until April 2, but the spectre of a global trade war continues to weigh on economic growth prospects and cloud the Federal Reserve’s (Fed) policy outlook.

Tariffs could drive inflation higher—potentially prompting the Fed to tighten policy more aggressively—yet they also threaten to hamper economic expansion. These conflicting forces add uncertainty to the Greenback’s trajectory.

Glimmers of hope on the Russia-Ukraine front

The Euro (EUR) may find support from signs of progress in Russia-Ukraine peace negotiations. Tensions appeared to cool slightly following a high-stakes meeting between Presidents Trump and Zelenskyy. Generally, a reduction in geopolitical risk encourages demand for riskier currencies, including the Euro.

On this, all the attention will be on the Trump-Putin call on Tuesday, with a potential ceasefire at the centre of the debate.

The monetary policy engine

It’s shaping up to be a pivotal week for central banks, with the Fed, BoJ, and BoE all widely expected to leave their policy rates unchanged. Each institution is also likely to highlight concerns over US trade policy—specifically, tariffs—which could weigh on global growth prospects.

The Federal Reserve is anticipated to hold rates within its 4.25%–4.50% target range. At its last meeting, Chair Jerome Powell cited robust US fundamentals, moderate inflation, and a tight labour market to justify the pause in tightening. Still, the spectre of tariff-driven price increases could complicate the Fed’s next moves.

Across the Atlantic, the European Central Bank (ECB) recently cut its key rates by 25 basis points and indicated that further easing might be on the table if uncertainty persists. Policymakers lowered Eurozone growth projections while slightly raising near-term inflation forecasts—yet they still expect inflation to cool by 2026. In the meantime, the notion that the ECB may pause its easing cycle is gaining traction among market participants.

Technical outlook

Immediate resistance stands at 1.0946, the March 11 high for 2025. A breakout above this threshold could open the door to 1.0969 (23.6% Fibonacci retracement), followed by the psychologically important 1.1000 mark.

Support levels begin at the 200-day Simple Moving Average (SMA) at 1.0726, the 100-day and 55-day SMAs at 1.0519 and 1.0467, and extend to 1.0359 (February 28 low), 1.0282 (February 10 low), 1.0209 (February 3), and 1.0176 (January 13 bottom for 2025).

Momentum indicators are pointing to a moderately bullish outlook: the Relative Strength Index (RSI) rose to around 72, entering the overbought region, while the Average Directional Index (ADX), above 30, suggests a strengthening uptrend.

EUR/USD daily chart

Short-term outlook

EUR/USD will likely remain highly reactive to trade policy developments, diverging central bank stances, and Eurozone growth prospects—especially if Germany moves ahead with increased spending. Meanwhile, any shifts in the Russia-Ukraine situation could rapidly reshape market sentiment, keeping traders glued to geopolitical headlines as much as economic data.