EUR/USD lurched higher on Thursday, breaks into fresh highs on tariff tantrum

• EUR/USD rose 1.8% on Thursday, breaking north of 1.1000.
• Bullish momentum cooled later in the day, but the Greenback remains notably on weaker footing.
• US NFP net job gains are on deck next, due on Friday.

EUR/USD rallied hard on Thursday, with the Euro getting pushed higher alongside the rest of the market as the US Dollar tumbles on the heels of the Trump administration's combined flat and "reciprocal" tariff packages that were unveiled this week. 

Forex Today: US NFP will be in the limelight

This week, the European side of the economic data docket is relatively sparse, but a new report on US Nonfarm Payrolls (NFP) will be published on Friday. This NFP data could significantly influence markets as the US economy transitions to a post-tariff landscape, with March's labor figures expected to serve as a "bellwether" for the effects of the Trump administration's tariff strategies.

US ISM Services Purchasing Managers Index (PMI) figures through March further hampered investor sentiment on Thursday, falling to a nine-month low of 50.8 and declining at one of its fastest month-on-month rates since the pandemic. Business activity and consumer confidence evaporated in the run-up to the Trump administration's tariffs, and post-tariff realities are unlikely to see sentiment recover quickly.

• Fed's Jefferson warns Fed is not in a rush to change rates
• Fed's Cook expects inflation progress to stall after tariffs

The Trump administration's "Liberation Day" tariff proposals have ignited global backlash, with former US Treasury Secretary Larry Summers claiming the government calculated tariffs without proper data. This claim aligns with the Trump team's publications, which explain that their reciprocal tariffs are computed by dividing a country's net exports to the US by imports from the US and then halving that figure, with a minimum tariff of 10%. As a result of the Trump administration's tariff "methodology", the US has imposed a 10% "reciprocal" tariff on Heard Island and McDonald Islands, A territory that remains entirely uninhabited by humans.

US President Donald Trump approved a 10% tariff on all imports effective April 5, with calculated "reciprocal" tariffs starting on April 9. According to Fitch Ratings, US economic growth will dip below the downgraded forecast from March. The Fitch Ratings agency has warned that the effects of Trump's tariffs will also reach the Federal Reserve (Fed), which may delay interest rate cuts as it monitors the inflation and employment impacts of these tariffs.

EUR/USD price forecast

On Thursday, EUR/USD experienced a significant rally, climbing substantially and settling close to the 1.1100 mark following the European session. The pair achieved notable intraday gains, propelled by ongoing bullish momentum that moved it toward the upper half of its broad daily range. Despite some oscillators signaling caution, the moving average configuration supports the bullish trend as it heads into the Asian session.

The technical outlook still leans toward the bulls. The Relative Strength Index (RSI) increased to 72.32, indicating overbought conditions, while the Moving Average Convergence Divergence (MACD) presents a sell signal, suggesting possible exhaustion. Nevertheless, other momentum indicators, such as the Williams Percent Range at -18.88 and Momentum at 0.022, provide a mixed to bullish perspective.

EUR/USD daily chart