Meanwhile EUR/USD rose above 1.13 for the first time since March 26 but the rally should be faded. Data was better than expected with the German trade surplus growing and industrial production falling less but these reports are not enough to be optimistic about the euro.
Trade tensions between the European Union and the US are at a boiling point with President Trump threatening $11B in tariffs over Airbus subsidies. In response, the EU is preparing its own list of retaliatory tariffs worth over $22B.
The World Trade Organization hasn’t officially recommended a penalty for the EU but if they do or the US pushes ahead with the tariffs, it will be very damaging for Eurozone and EUR.
ECB’s Last monetary policy was dovish. 16th April German ZEW Economic Sentiment and 18th April Eurozone PMIs. French Service and Manufacturing PMI, German Service and Manufacturing PMI are scheduled for release next week. And if the data softens, reinforcing the central bank’s concerns, EUR/USD will drop. Ultimately, I do expect the pair to test 1.1080
Immediate resistance at 1.1350. If 1.1350 break and stable next target 1.1425. I think it is tough to break out 1.1425 if US-Eurozone doesn’t come to negotiation.
On the other hand, immediate support at 1.1250/1.1240. If 1.1240 breaks and stable next target 1.1180/1.1170. If 1.1170 breaks and stable final target 1.1100/ 1.1080.