EUR/USD Price Analysis – April 18, 2025
Daily Price Outlook
During the early European trading session on Friday, the EUR/USD currency pair attracted some buying interest near 1.1380 level.
However, the major driver of the pair's upward movement is the ongoing concerns over the economic impact of tariffs, which continue to weigh on the US Dollar (USD) against the Euro (EUR).
Moreover, the gains could be short-lived as the European Central Bank's recent rate cut to 2.25% weighs on the Euro. This dovish move, coupled with ongoing trade tensions, limits the Euro’s potential for further strength.
EUR/USD Finds Support from ECB's Rate Cut and Dovish Outlook
The European Central Bank (ECB) made headlines with its decision to cut interest rates for the third time this year, bringing its main interest rate to 2.25%.
This move was prompted by slowing economic growth in the Eurozone, worsened by the impact of US tariffs on European goods.
ECB President Christine Lagarde acknowledged that tariffs, which have surged from an average of 3% to 13%, are weighing on the European economy's outlook.
Despite the dovish stance, the Euro has managed to hold its ground. The ECB's rate cut has led to concerns over the Euro’s long-term strength, with analysts speculating that further cuts could follow in June. However, the Euro’s resilience stems from ongoing trade tensions, which continue to pressure the US Dollar.
While the ECB remains focused on downside risks to growth, the Euro's positive movement, albeit limited, reflects cautious optimism in the face of broader economic challenges.
Fed's Hawkish Stance and USD Pressure
On the other side of the Atlantic, the US Dollar has faced pressure despite Federal Reserve Chair Jerome Powell’s recent hawkish comments. Powell warned that the US economy could face stagflation—slowing growth combined with high inflation—which reduced the chances of a rate cut in June.
While this initially supported the USD, ongoing trade tensions and broader economic uncertainty have since weighed on the currency, allowing the Euro to gain some ground.
Despite this, money market traders are still pricing in nearly 86 basis points of Fed rate cuts by the end of 2025, with the first cut expected in July, according to the CME FedWatch Tool.
This long-term outlook for rate cuts has led to continued weakness in the USD, providing support for the EUR/USD pair in the medium term.
EUR/USD – Technical Analysis
EUR/USD continues to coil within a tightening symmetrical triangle, with price hovering around the 1.1370 level. This consolidation phase suggests a breakout is imminent, as the pair trades near converging trendlines while holding above the 50-period SMA at 1.1353. The structure remains neutral, but a dip to the 1.1344–1.1350 region may provide a buy-the-dip opportunity.
The 50-SMA has turned higher, offering support in line with the lower triangle boundary. The RSI is at 54.31, indicating balanced momentum with slight bullish bias. A bounce from the buy zone could trigger upside toward 1.1416, with further extension to 1.1427 if volume confirms.
Should price break below 1.1344, the setup weakens, and downside toward 1.1318 and potentially 1.1304 could follow. A confirmed breakout above triangle resistance, however, could validate a push toward the 1.1470 area in the coming sessions.
Related News
- GOLD Price Analysis – April 18, 2025
JOIN LHFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.