Bullish view

• Buy the EUR/USD pair and set a take-price at 1.0935.
• Add a stop-loss at 1.0685.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.0685.
• Add a stop-loss at 1.0935.

(Click on image to enlarge)

The EUR/USD pair continued its strong downtrend this week. It has dropped in the past five straight days, and is hovering at its lowest point since March 7. It slipped by 1.55% from its highest level this year.
 

Euro crash gains steam

The EUR/USD pair continued falling even after Moody’s warned about US public finances. In a report on Tuesday, Moody’s warned that the fiscal situation in the US was deteriorating because of Donald Trump’s tariffs and planned tax cuts.

Moody’s said that the situation had deteriorated as it predicted when it assigned a negative outlook in 2023.

Data released on Tuesday confirmed that the US economy was deteriorating as consumer confidence dropped. According to the Conference Board, confidence dropped from 100.1 in February to 92.9 in March, missing the estimate 94.2.

Falling consumer confidence is risky because it signals that these people may decide to lower their spending because of Donald Trump’s tariffs. Trump has pledged to implement major tariffs on imports as he seeks to narrow the large trade deficit with key countries.

Tariffs are taxes that are usually passed on to consumers. On the positive side, there are signs that Trump will abandon the idea of a universal tariff on all imports. Instead, he is considering a two-step process. For example, Trump said that he was ready to give a lot of countries breaks.

The ongoing mixed messaging about tariffs is a sign that officials in the administration are continuing their debate about them.

There will be no economic data from Europe on Wednesday. As such, traders will focus on the upcoming US durable goods orders, which will provide more details about the US economy. Economists expect the data to show that durable orders dropped by 0.6% in February after growing by 3.1% a month earlier.

EUR/USD technical analysis

The daily chart shows that the EUR/USD pair has dropped in the past few days. This retreat started after hitting the year-to-date high of 1.0935 to a low of 1.0790, its lowest level since March 6.

The pair has moved to the major S/R pivot point of the Murrey Math Lines. It is forming a cup and handle pattern, a popular bullish sign. Therefore, the pair will likely bounce back, with the initial target being the year-to-date high of 1.0933. A drop below the support at 1.0700 will invalidate the bullish view.

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