• EUR/USD is in the face of intensive sales when US President Donald Trump confirms that he will impose tariffs on the European Union.
• The American Dollar strengthens when investors rush to a unthreatening fleet among the global trade war.
• Investors are waiting for the PMI Manufacturing in the USA in January.

EUR/USD NOSED is over 1% to almost 1.0240 at the beginning of the week. The main currency pair will fall when the President of the United States (USA) Donald Trump repeats the threat of applying tariffs to the European Union (EU). At the weekend, Donald Trump hit 25% tariffs on Canada and Mexico and 10% on China. Trump also warned that he would also raise the fees for the commercial block, but did not provide much information.

“It will certainly happen in the European Union. I can tell you this because they really took advantage of us, “said Trump. He also accused the Old Continent of not buying enough American cars and agricultural products. Trump added that the EU takes “almost nothing and we take everything from them.”

Applying tariffs to the euro area will speed up his trouble. A common block of currency already has a risk of slowing down. Preliminary data of the gross domestic product in the euro area (GDP) for the fourth quarter of 2024 showed that the economy was flat after increasing 0.4% in the third quarter. The shrinking German economy remained a indigent connection with the growth of GDP in the euro area. Flash german GDP has shown that the economy concluded a contract by 0.2% year -on -year in the last quarter of 2024.

Signs of the further weakness of the euro zone economy may force the European Central Bank (EBC) to further reduce interest rates. On Thursday, the ECB reduced the rate of deposit interference by 25 base points (BPS) to 2.75% and led that the monetary policy path is clear, which is sweeping. Traders fully valued in three interest rate reductions and see that they are coming to summer, because EBC officials are convinced that this year inflation will return to the desired foot 2%.

On Monday, the harmonized report of the Flash consumer price index (HICP) for January showed that price pressure is draining a month to a month. Basic HICP – which excludes unstable prices of food and energy – defined by 1% after an raise in 0.5% in December. At the same time, the HICP header also drained by 0.4%. In the year, the HICP header constantly increased by 2.7%, faster than estimates of 2.6%. The basic HICP increased by 2.5%, faster than expectations of 2.4%.

Daily Digest Market Movers: EUR/USD is directed to the pointed sale of the global trade war

• EUR/USD stands for intensive sales due to the strength of the American dollar (USD). Safe demand for the American dollar increased significantly when the US President Trump began the trade war. The American dollar index (DXY), which follows the Greenback value compared to the six main currencies, increases above 109.50.
• The American dollar movement is mainly influenced by Trump’s comments on global trade. However, investors will also focus on a lot of US economic data, such as ISM Manufacturing and Services Buxing Managers Index (PMI), ADP employment and payroll lists (NFP) in January, as well as job offers in December, which will publish job offers that will publish work In December this week.
• Investors will pay special attention to data related to the labor market to learn its current status. On Wednesday, the Fed maintained interest rates at the current levels and led that the central bank would remain in the waiting mode until he saw “real progress in inflation or weakening of the labor market.”
• In the Monday session, investors will focus at the American Institute Management Management Management Managers Index (PMI) and changed data S&P Global Manufacturing PMI in January.

Technical analysis: EUR/USD sees more disadvantages because the RSI will slip below 40.00

EUR/USD dives vertically to almost 1.0200. Last week, the main currency pair began to fall after a miniature transfer to recovery to 1.0533, which market participants benefited from adding shorts. The pair has fallen below 20- and 50-day interpretation medium-sized (EMA), respectively, about 1.0378 and 1.0440, as suggested by bears.

The 14-day relative strength (RSI) indicator moves below 40.00, which is suggested by a powerful bear rush.

Looking down, the lowest level of January 13 1,0177 and a round level of 1.0100 will act as the main support zones for the couple. And vice versa, psychological resistance of 1.0500 will be a key barrier to the euro bulls.