EUR/USD Today 03/06: Beware Of Renewed Selling (Chart)

(MENAFN- Daily Forex) EUR/USD Analysis Summary Today

• Overall Trend: Upward.
• Today's Euro-Dollar Support Levels: 1.1360 – 1.1290 – 1.1180.
• Today's Euro-Dollar Resistance Levels: 1.1485 – 1.1560 – 1.1630.

EUR/USD Trading Signals:

• Buy Euro-Dollar from the 1.1290 support level with a target of 1.1420 and a stop-loss of 1.1200.
• Sell Euro-Dollar from the 1.1500 resistance level with a target of 1.1200 and a stop-loss of 1.1610.

EUR/USD Technical Analysis Today:

The fate of tariffs between the European Union and the United States continues to dictate the trading direction of the EUR/USD in the coming days. The start of the US jobs report week was bullish, with the Euro-Dollar jumping towards the 1.1450 resistance level, near the pair's five-week high, before settling around 1.1424 at the time of writing, awaiting further developments.

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According to trusted brokerage platforms, Euro trading is experiencing a notable rise with renewed global trade uncertainty due to Donald Trump. Technically, the EUR/USD gains have pushed performance past a chart resistance line at 1.1418, opening the door for a rise to 1.1450, a target we consider suitable for this week's forecast. However, today's close must be above the 1.1418 resistance level to confirm its breach, and a retracement during the day is possible. Currency exchange rates tend to remain in contact with the nine-day moving average, implying a slight rebound is possible before the rally resumes. Overall, the EUR/USD has returned to its strong trajectory, and the stronger path is upward in the coming days, driven by a compelling fundamental narrative surrounding escalating global trade tensions.

US President Donald Trump must have been influenced by the calm that followed the US-China trade agreement in early May, as he now accuses China of violating this agreement. Furthermore, after markets closed on Friday, the US president raised tariffs on aluminium and steel. Overall, uncertainty surrounding tariffs has escalated again following Trump's announcement on Friday evening that he would double tariffs on steel and aluminium, to 50%, effective June 4. Consequently, the EUR/USD pair has returned above 1.1350, US bond yields are seeing a significant increase, while stock futures are seeing a significant decline.

Please keep in mind that the current rise in the Euro's price is part of the traditional market reaction to escalating tariff tensions. Meanwhile, Trump's reminder of his support for tariffs and his dissatisfaction with the US trade balance will support the 2025 bullish trend for the foreseeable future. Also, we would not be surprised if the EUR/USD records new record highs as a result.

Be cautious: Tariffs pose a problem for the dollar as they will undermine US economic growth. The problem is that the US economy is still performing well, undermining this premise. Sooner or later, data will begin to show the type of weakness that US dollar sellers have anticipated in recent months. The June data schedule is important because it provides data covering a period that will certainly embody trade uncertainty. With strong demand for the US dollar, large movements will be in response to better-than-expected data that challenges gloomy forecasts, leading to an unbalanced upward reversal for the US dollar (i.e., a drop in the EUR/USD).Trading Tips:

We still advise selling the Euro against the US Dollar on every strong upward rebound, but without taking risks and while monitoring the factors influencing the trading of this currency pair this week.

Besides the fate of tariffs, everyone will be cautiously awaiting the crucial US Non-Farm Payrolls figures on Friday. The consensus expects a 125,000 job increase in May, with a decline in private sector jobs and indications of job losses in the manufacturing sector. The country's unemployment rate is expected to remain stable at 4.2%. According to currency experts, if the unemployment rate rises more than expected, we believe the market reaction could be swift. Consequently, the dollar and bond yields are likely to fall as the market rushes to price in data-dependent Federal Reserve interest rate cuts.

EURUSD Chart by TradingViewEuro Trading Will Monitor ECB Meeting Results

Don't forget the European Central Bank meeting next Thursday. Although the US dollar's interest rate is undoubtedly the most important factor, we expect some short-term volatility around the decision. A 25-basis point rate cut is expected to lower the key interest rate to 2.0%. The cut itself is not the decisive factor, but rather the forward guidance that will move the exchange rate. With inflationary pressures subsiding in the Eurozone, there is little incentive for President Christine Lagarde to disregard further interest rate cuts, especially if the ECB believes that US tariffs will negatively impact future growth.

Overall, the continuous flow of cuts is expected to benefit the Eurozone economy, but it will hinder the Euro's progress. Lagarde is very likely to stick to her usual message: that interest rates are not on a predetermined path and that the ECB remains data dependent. This means more cuts are coming, but there is no need to anticipate a faster pace, nor to bet on more cuts later beyond what is already expected. This will provide limited opportunity to guide Euro exchange rates in any meaningful direction, and movements following the ECB decision are likely to fade as a result.

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