EUR/USD Struggles as Tariff Risks, ECB Rate Cut Prospects Weigh

The euro edged up but stayed pressured around $1.03 amid uncertainty over Trump’s tariff policies. Over the weekend, Trump confirmed a 25% tariff on Mexican and Canadian imports, a 10% duty on Chinese goods, and threatened EU tariffs, citing the U.S. trade deficit. However, Mexico secured a one-month delay by agreeing to deploy 10,000 troops to curb fentanyl trafficking. The euro also faced pressure from the ECB’s dovish stance and prospects of further rate cuts after last week’s expected 25bps reduction. Meanwhile, Euro Area inflation rose to 2.5% in January, above the 2.4% forecast, while core inflation held at 2.7%, defying expectations of a slight dip.

From a technical perspective, the first resistance level is at 1.0305, with further resistance levels at 1.0360 and 1.0460 if the price breaks above. On the downside, the initial support is at 1.0220, followed by additional support levels at 1.0180 and 1.0120.