- EUR/USD gained 0.4% on Thursday, ending a six-day losing streak.
- The pair nears the 200-day EMA, hinting at a possible trend reversal.
- Markets brace for key US inflation data ahead of impending tariffs.
EUR/USD bounced back on Thursday, rising 0.4% and snapping a six-day losing streak that saw the pair decline by 2% from peak to trough. Despite the temporary relief, tariff concerns remain a key focus for investors. However, markets found some respite as US President Donald Trump refrained from announcing new tariff measures.
US Q4 GDP grew by 2.4%, slightly exceeding the 2.3% forecast. Meanwhile, Moody’s warned that increasing tariffs and tax cuts could significantly widen the US budget deficit, potentially triggering a debt rating downgrade and higher Treasury yields. S&P Global highlighted the risks of US policy uncertainty to global growth, while Fitch Ratings noted that smaller economies like Brazil, India, and Vietnam could struggle to afford US goods under current tariff conditions. Additionally, the Congressional Budget Office (CBO) revised its 2025 GDP forecast down to 1.9%, projecting stagnant growth through 2035. Inflation is expected to slow by 2025, while the budget deficit could rise to 7.3% of GDP without policy adjustments.
The market’s next key focus is the US Core Personal Consumption Expenditures (PCE) Price Index, set for release on Friday. Investors hope that recent inflation upticks are temporary, but expectations suggest an annualized rise to 2.7% YoY in February.
EUR/USD Price Outlook
With the recent losing streak halted, EUR/USD bulls aim to reclaim the 1.0900 level. While buyers managed to stabilize the pair, price action remains near the 200-day Exponential Moving Average (EMA) around 1.0700. If this support fails, selling pressure could intensify, potentially dragging the pair down toward the last swing low near 1.0350.
EUR/USD daily chart
