EUR/USD Price Outlook: Bullish Momentum Loses Steam

US Dollar Losses Halt

The euro has seen notable gains since the beginning of April, largely driven by a weakening US dollar following the Trump administration’s imposition of comprehensive tariffs. This trend was intensified by uncertainty over the future of US trade relationships and concerns about a potential supply crisis stemming from disrupted imports—particularly from China—due to the steep US tariffs on Chinese goods. In response, China is seriously considering reducing or suspending some tariffs on US imports that are critical to certain Chinese industries.

While some US assets, such as stocks, recovered part of their losses after President Trump suspended some tariffs to allow for trade negotiations (excluding China), and later signalled a possible easing of tariffs even on Chinese goods, the US dollar failed to regain much ground. However, the US dollar index eventually stabilized, halting its downward trajectory.

Key Data Awaited

Tomorrow, markets are focused on critical US economic data: the preliminary GDP figures for the first quarter. Expectations point to a sharp slowdown in growth—from 2.4% in the fourth quarter of last year to just 0.4% in the first quarter of this year. However, this reading does not yet reflect the impact of the April tariff impositions. The second-quarter GDP data is expected to show signs of economic contraction.

Markets are also awaiting preliminary European GDP figures for the same period, projected to remain steady at 0.2%, unchanged from the previous quarter. As with the US, the European second-quarter figures are likely to reveal a contraction—despite the European Central Bank continuing its rate-cutting policy since last year.

Euro/Dollar Rates: Upward Momentum Decelerates

On April 22, the EUR/USD rate surged to a multi-year high of 1.1573 before retreating later that day as traders took profits. The pair is now trading within a zone between 1.1176 and 1.1510 and appears to be heading toward the low end of that zone after failing to break above its high end. A daily close below the low end of that zone would signal a further loss in upward momentum and could lead to a correction toward 1.0981. In that case, the support level at 1.1053 should be considered.

Levels to Consider in the Opposite Scenario

Conversely, a daily close above the high end of the trading zone at 1.1510 could indicate a stronger upward momentum and suggest a possible rise toward 1.1715. In this scenario, the resistance level at 1.1664 should be closely watched.

EUR/USD price – Daily Chart

Chart Source: ADSS Platform