empty
11.03.2025 01:39 AM
EUR/USD. Intermission

Last week, the euro-dollar pair surged over 500 points, rising from a low of 1.0378 to a high of 1.0889. However, buyers did not attempt to push past the 1.09 level. Instead, the currency pair consolidated within the 1.08 range, drifting sideways due to a nearly empty economic calendar on Monday.

On that Monday, important macroeconomic reports from Germany painted a mixed picture. While industrial production showed strong growth, exports experienced a significant decline. As a result, the EUR/USD pair struggled to find a clear direction. During the European session, the pair fluctuated, initially dropping to the lower boundary of the 1.08 range at 1.0806, before rising by a few dozen points to reach a daily high of 1.0875.

This image is no longer relevant

Germany's industrial production rose 2.0% in January, marking the fastest growth rate since June last year. Analysts had expected a more modest increase of 1.6%. The surge was primarily driven by a sharp rise in automobile production, which jumped by 6.4%. Additionally, December's result was revised upward. Initially, production was reported to have contracted by 2.4%, but updated data showed a decline of only 1.5%.

However, Germany's exports fell by 2.5% in January on a monthly basis, contrary to expectations of a 0.5% increase, signaling uncertain economic prospects. The country's trade surplus for January stood at 16 billion euros, well below the 20.6 billion euros expected by analysts.

The conflicting macroeconomic reports did not provide clear support for either buyers or sellers of the EUR/USD currency pair. Additionally, the broader fundamental context raises more questions than it answers. European Trade Commissioner Maros Sefcovic stated on Monday that Washington has no intention of preventing a trade war with the EU and does not plan to negotiate a deal with Brussels. He noted that the U.S. side "does not want to negotiate."

As is widely known, the 25% U.S. tariffs on all steel and aluminum imports from the EU are scheduled to take effect in two days. While former President Trump could choose to cancel or delay these tariffs at any moment, Sefcovic's comments indicate that no such action is expected.

This statement puts pressure on the dollar, especially since Sefcovic hinted at potential retaliatory measures (without specifying any details). On the other hand, markets still consider that the U.S. president may postpone the tariffs at the last minute, just as he did with tariffs on Mexico and Canada (delaying them until April 2).

Moreover, key U.S. inflation data is set to be released on Wednesday and Thursday. Ahead of these reports, EUR/USD traders are hesitant to take large positions, whether long or short.

Preliminary forecasts suggest that February's CPI may finally start to slow—only slightly, but the key factor is that it will be trending downward. The overall Consumer Price Index is expected to come in at 2.9% year-over-year (down from January's 3.0% target), while the core CPI is projected at 3.2%, compared to 3.3% the previous month. It is important to note that this release will not change the Federal Reserve's decision to hold rates steady in March. However, it could influence market sentiment regarding the possibility of a rate cut in May.

Currently, markets see a 50/50 chance of a May rate cut. If February's CPI accelerates instead of slowing, traders will likely shift their focus to the June meeting, especially after Powell recently stated that the Fed "can afford to be patient." On the other hand, if CPI slows more than expected, the probability of a May rate cut will remain on the table, putting significant pressure on the dollar.

Given these uncertainties, it is unsurprising that EUR/USD traders are exercising caution. After a sharp 500-point rally, the pair has essentially stalled, waiting for key releases. Additionally, the "quiet period" began—a 10-day window before the Fed meeting during which policymakers were prohibited from making public statements about monetary policy.

In light of the current uncertainty, a wait-and-see approach appears to be reasonable for the pair. Buyers have not been able to break above the 1.09 level, while sellers have struggled to push the price below 1.0800. Looking ahead, there are two possible scenarios: the pair could either resume its upward trend, which would require a firm hold above the upper Bollinger Bands line on the H4 timeframe at 1.0890, or it may enter a broad correction, potentially dropping to 1.0750 or lower. At this moment, there are no clear signals favoring either outcome, creating a sort of "intermission."

Irina Manzenko,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

A New Problem Rises for America – The Debt Ceiling (Expecting #SPX and #NDX to Resume Their Decline After a Likely Short-Term Recovery)

The confrontation between the U.S. and the EU has entered a new phase. The U.S. president is taking a hardline approach toward Europe, effectively following a "tit for tat" strategy

Pati Gani 14:06 2025-03-14 UTC+2

USD/JPY: Analysis and Forecast

The Japanese yen is losing ground today. Positive news on U.S.-Canada trade negotiations and reports that Democrats have secured enough votes to prevent a U.S. government shutdown are improving global

Irina Yanina 13:33 2025-03-14 UTC+2

XAU/USD: Analysis and Forecast

Gold is consolidating after reaching a new all-time high. Concerns over U.S. President Donald Trump's aggressive trade policy and its impact on the global economy continue to drive demand

Irina Yanina 10:08 2025-03-14 UTC+2

What to Pay Attention to on March 14? A Breakdown of Fundamental Events for Beginners

There are few macroeconomic events scheduled for Friday, and none of them are significant. The UK will release reports on GDP and industrial production, but strong figures are not expected

Paolo Greco 07:05 2025-03-14 UTC+2

GBP/USD Pair Overview – March 14: The Last Day of the Week as a Mere Formality

On Thursday, the GBP/USD currency pair also began a slight downward correction. While the pound did not depreciate significantly, explaining why it rose for two weeks is difficult. Of course

Paolo Greco 02:39 2025-03-14 UTC+2

EUR/USD Pair Overview – March 14: Maybe That's Enough?

The EUR/USD currency pair finally began to decline on Thursday, but once again, this movement was not linked to macroeconomic factors or fundamental events. It wasn't even related to Donald

Paolo Greco 02:39 2025-03-14 UTC+2

EUR/USD: A Southern Impulse That Should Not Be Trusted

On Thursday, the EUR/USD pair reached a three-day low of 1.0823 but did not break into the 1.07 range, as the downward momentum gradually faded. The EUR/USD pair is currently

Irina Manzenko 23:55 2025-03-13 UTC+2

Euro Faces a Potential Coup d'Etat

The Green Party responded to Friedrich Merz's call for a coalition between the CDU and the Social Democrats, aimed at abolishing the fiscal brake, with a strong rebuttal: "We don't

Marek Petkovich 23:45 2025-03-13 UTC+2

U.S. Inflation Brings Relief to the Fed but Not to the Markets

The euro and pound showed little reaction to news that consumer prices in the U.S. grew at their slowest pace in four months in February—a welcome sign for American households

Jakub Novak 11:14 2025-03-13 UTC+2

Euro Faces Some Challenges

The European currency has encountered some difficulties in its upward movement following yesterday's speech by the European Central Bank (ECB) President. "The eurozone economy is facing exceptional shocks caused

Jakub Novak 10:39 2025-03-13 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.