The Eurozone raises import tariffs as well.

The euro continues to strengthen as investors see increasing signs of successful negotiations. The current negotiations aim for a ceasefire, with the U.S. acting as a mediator to enforce a 30-day truce with Russia. This negotiation is part of an agreement with the Trump administration in exchange for halting military aid and intelligence sharing. The U.S. has presented this proposal to Russian President Vladimir Putin, offering an opportunity for diplomatic talks.

However, trade tensions have escalated following the U.S. decision to impose a 25% tariff on steel and aluminum imports from Canada, Australia, the European Union, and other countries last Wednesday. In retaliation, the Eurozone has implemented countermeasures by imposing tariffs on U.S. goods, amounting to an estimated €26 billion, set to take effect in April. These tariffs will cover steel, aluminum, textiles, meat products, and other goods. Additionally, the euro has appreciated due to expectations of increased domestic defense spending, which is expected to support the region’s economy.

The European Central Bank (ECB) has cut interest rates by 25 basis points, in line with market expectations. The deposit rate has been lowered to 2.50%, the main refinancing rate to 2.65%, and the marginal lending rate to 2.90%. This decision reflects a declining inflation trend. Furthermore, the ECB has acknowledged its intention to maintain an accommodative monetary policy to reduce borrowing costs for businesses and households. However, the central bank remains cautious of other risks, such as escalating global trade wars, which could directly impact Eurozone exports and temporarily stall domestic economic growth.

The ECB projects inflation rates of 2.3% in 2025, 1.9% in 2026, and 2.0% in 2027, with core inflation expected to approach the 2% target. Although domestic inflation remains high due to wage adjustments, wage growth is slowing. Economic growth is forecasted to decline to 0.9% in 2025 and 1.2% in 2026, reflecting weak exports and investment. The ECB continues to rely on economic data before making further rate cuts to ensure inflation remains stable at its medium-term target of around 2%.

The Eurozone economy expanded by 1.2% year-on-year in Q4 2024, marking the fastest growth since 2023. This expansion was driven by lower borrowing costs and easing inflationary pressures. Household consumption grew by 1.5%, up from 1.1% in Q3, while government spending increased by 2.8%. However, the Eurozone’s trade balance remained stable compared to the previous quarter, as exports rose by 1.1% and imports increased by 1.2%. Spain led with strong economic growth of over 3.5%, followed by the Netherlands at 1.8%. Meanwhile, Germany, one of the largest economies in the region, remains in contraction.

Techical analysis data (5H)

Resistance: 0.9206, 0.9221, 0.9247

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.9139 - 0.9165 but cannot break the support at 0.9165, you may set a TP at approximately 0.9221 and SL at around 0.9124 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.9206 - 0.9221, you may set a TP at approximately 0.9247 and SL at around 0.9139 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.9206 - 0.9221 but cannot break the resistance at 0.9206, you may set a TP at approximately 0.9139 and SL at around 0.9247 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.9139 - 0.9165, you may set a TP at approximately 0.9124 and SL at around 0.9221 or according to your acceptable risk.

Pivot point March 12, 2025 09:53 PM. GMT+7