EUR/USD: Trump sculpts world trade … with a chainsaw!

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The euro was bothering a consolidation phase, legitimate with regard to a recent advance since March 03, advanced catalyzed by increasingly lively concerns about a possible inflection point in the American economy, the most powerful in the world. The various reports of inflation, much awaited in these conditions, came out at rather reassuring levels this week, whether for prices on the producer side, for consumer prices. Not enough to sweep the concerns about the prices for the next few months, as the rise in tensions in the trade war led by Trump makes price dynamics trajectories less readable. And this to the chagrin of the Fed which brings together its monetary policy committee next week.

“Inflation is gradually retreating. However, the shock of uncertainty caused by the erratic economic announcements of the Trump administration considerably complicates the task of the federal reserve,” notes Paolo Zanghieri, principal economist at Generali Investments. “As Jerome Powell, president of the Fed, pointed out last week, the good health of the economy allows the central bank not to precipitate a drop in rates as long as political uncertainty is not partly dissipated. This should be the key message of the March meeting. We anticipate little changes in the current position of the FOMC, which still predicts two drops of rate this year and two others in 2026”.

This health of the first economy in the world is certainly “good”, but questioning about a possible inflection point becomes more and more intense, especially from a very disappointing statistical serié, on the feeling of the consumer and consumption itself. Recall that consumption is structurally, across the Atlantic, the main engine of the creation of national wealth. Under these conditions, traders will carefully follow consumer confidence data (U-Mich), in preliminary data, after the disappointment last month.

Latest development in what should be called a trade war, Donald Trump, threatened to tax, imports of spirits 200%. On its social network Truth Social, the tenant of the White House referred to “villains of customs rights of 50% on whiskeys” set up by the European Union.

Recall that in reaction to customs duties of 25% set up by the United States on imports of steel and aluminum from all over the world, both the European Union and China and Canada have announced retaliatory measures. Donald Trump himself indicated that he would in turn retaliate, by putting customs duties that could “be a little more than reciprocal” on April 4.

At midday on the foreign exchange market, the euro was treated against $ 1,0,900 approximately.

Key graphics elements

The crossing in significant volatility of $ 1,0608 changes the situation on the configuration of the currency pair, which has just validated a resumption of support on a long mobile average, at 50 days (in orange), which begins a resource figure. The scenario of a fast melting towards the perfect parity (€ 1 = $ 1) is invalidated.

Medium term

In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on Euro dollar parity (Eurusd).

We will keep this neutral opinion as long as the EURO Dollar parity prices (EURUSD) are positioned between the support at 1,0758 USD and the resistance to USD 1,1012.

Daily data graphics