EUR/USD Surges Higher As Tariff Walk-Back Eases Tensions Further

By Joshua Gibson of FX Street

Thursday, April 10, 2025 7:50 PM EDT

Bank Note, Euro, Bills, Paper Money

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EUR/USD surged over 2.5% on Thursday, hitting a 21-month high.
The Trump administration’s cyclical tariff strategy has eased market tensions for now.
Key US sentiment figures remain on the docket to round out the trading week.

EUR/USD roared into its highest bids in nearly two years on Thursday, breaching and closing above the 1.1200 handle for the first time in 21 months. Market tensions continue to ease following the Trump administration’s last-minute pivot away from its own tariffs, sparking a general softening in US Dollar flows.

In March, US Consumer Price Index (CPI) inflation significantly fell short of projections. Core CPI decreased to 2.8% year-over-year, marking a four-year low after remaining above 3.0% for almost eight months. Headline CPI inflation also dropped to 2.4% year-over-year. Investment markets would face severe challenges if tariffs reverse the Federal Reserve's (Fed) years of efforts to control inflation.

The week will conclude with the University of Michigan (UoM) Consumer Sentiment Index survey results on Friday. The UoM Consumer Sentiment Index is anticipated to decline once more in April, as consumers struggle under the pressure of the Trump administration’s tariff and trade policies, likely falling to a nearly three-year low of 54.5. Additionally, Consumer Inflation Expectations will be released on Friday, with UoM 1-year and 5-year Consumer Inflation Expectations previously recorded at 5% and 4.1%, respectively.

EUR/USD price forecast

A sharp increase in bullish momentum pushing Fiber bids higher has left price action strung out in no man’s land. 1.1200 remains a tricky level for Euro bidders to overcome, and intraday traders could be on the lookout for signs of fresh technical weakness to drag the pair back down.

Technical oscillators are flashing firm warning signs of overbought conditions, and bidders will have an increasingly difficult time keeping bids on the high side of the 200-day Exponential Moving Average (EMA) near 1.0885.