EUR/USD shows strength among uncertainty about US economic perspectives

EUR/USD increases to almost 1.0850, because the American dollar weakens due to the acceleration of fears about the US economic perspectives.
The policy of US President Trump will be expected to sluggish US economic growth.
Centeno EBC expects that the Euro zone inflation is almost outside the forest.

EUR/USD trades strongly around 1.0850 after recovering early losses during a Monday session in North America. The main pair of currencies strengthens when the US dollar (USD) tries to conquer the ground after a pointed decline last week. The American dollar index (DXY), which follows the Greenback value compared to the six main currencies, trades near the fresh four -month lowest level 103.50.

The perspectives of the American dollar are uncertain, and investors will become more and more concerned about how the policy of the President of the United States (USA) Donald Trump “first” shapes the economy. On Friday, the president’s comments in an interview with Fox News indicated that Trump’s policy should lead to low -term economic shocks.

“There is a period of passage because what we do is very large,” said Trump in the program “Sunday Morning Futures”. This comment came after he was asked about the possibility of recession.

Recently, a lot of American data has indicated signs of economic slowdown, such as 15-month low consumer trust, an unexpected decrease in modern ISM production orders and slightly lower than expected non-farmed wages (NFP) in February. Poor data forced traders to raise plants supporting the federal reserve (FED) to resume the Easy Politics cycle at the June meeting. According to the CME Fedwatch tool, the probability of lowering interest rates in June increased to 82% from 54% a month ago.

Meanwhile, Fed Chairman Jerome Powell continued to lead the “Wait and see” approach in relation to interest rates due to the lack of Trump’s tariff and tax transparency. “Uncertainty about the policy of Trump’s administration and their economic effects remains high,” said Powell at the Economic Forum at the University of Chicago Booth School on Friday, and net policy of trade, immigration, fiscal and regulation is crucial for the economy and monetary policy. “

Daily Digest Market Movers: EUR/USD shows strength despite the transaction of euro with caution

EUR/USD remains higher, while the euro (EUR) trads caution in front of the main peers at the beginning of the week. The euro faces pressure when profits after a solid moves begin last week. The euro achieved better results as German leaders, including probably the modern Chancellor Frederich Merz, agreed to extend the loan limit or the so -called “debt brake” and create an infrastructure fund by EUR 500 billion (EUR) to augment defense expenditure and stimulate economic growth.
The decision of Germany of enormous economic stimuli forced traders to establish plants supporting the European Central Bank (EBC) to reduce interest rates twice as much this year, assuming that the impact may be inflationary for the euro area. Last week, EBC lowered deposit rates by 25 base points (BPS) to 2.5%, but did not make a fixed path of monetary expansion.
Meanwhile, the comments of ECB and Governor of the Portuguese Bank Mario Centeno at the conference on Friday indicated that more interest rate reductions are in preparation. Centeno said that the euro zone is on the road to “normalization of monetary policy”. After the perspective of inflation, Centeno said that inflation is “almost outside the forest” and developed “a level that is much closer to our goal.”
On the economic front, German industrial production data from month to month increased at a faster than expected pace in January. Industrial production of the euro area locomotive increased by 2%, definitely than 1.5%estimates. In December it fell by 1.5%. Meanwhile, trust in Sentix investors in the euro area improves to -2.9 in March from -12.7 in February.

Technical analysis: EUR/USD remains above 200-day EMA

EUR/USD stabilizes around 1.0850 after correcting to almost 1.0800 on Monday. The main pair of currencies strengthened after the decisive breakthrough above the highest level on December 6 1.0630 last week. Long-term perspectives of the main currency pair are stubborn because it persists above 200-day interpretation of the movable medium (EMA), which trads around 1.0640.

The 14-day relative strength (RSI) indicator jumps to almost 70.00, which indicates a mighty stubborn momentum.

Looking down, the highest level of December 6 1.0630 will act as the main support zone for the couple. And vice versa, the highest level of November 6 1.0937 and 1.1000 psychological level will be key barriers to the euro bulls.