EURUSD has witnessed impressive gains even before the Tariff war began in April this year. Between January 2025 and now, the currency pair has seen a 13% appreciation, with over half of this coming before the April 2 Liberation Day announcements from the US government.
Where do we go from here?
Let’s look at this first from a technical standpoint.
Here’s the EURUSD price chart on the weekly timeframe:
You can notice a fair value gap emerging over the past 10-15 weeks. This suggests a pullback of sorts over the next few weeks before the price can continue to appreciate.
However, I expect the pullback to be muted and the pair may not see big swings down. This is because the Relative Strength Index demonstrates incredibly high bullish momentum.
This is evident from the movement of the Stochastic Oscillator over the past couple of weeks – even though there is a downward movement on the SO – indicating a pullback, in absolute terms, the drop has been very marginal.
This indicates that while the currency pair may fail to see the bullish momentum continue for the next few weeks, the pullback may also be muted.
In other words, this is going to be a ranging market stuck between the Support/Resistance levels of 1.12500 and 1.15800.
This could however change with new news coming in.
The United States and China are finally on talking terms with respect to the tariff negotiations. Combine this with the Flash PMI figures that are expected to drop in from France and Germany later this month – you could see some testing of the support and resistance levels; and a possible breakout as well.
If you are a swing trader, now is a good time to take a break. It’s a day trader’s paradise in the meantime however.