Selling EURUSD from 1.0740

As financial markets remain gripped by uncertainty ahead of tomorrow’s announcement on tariff measures, economists are striving to assess the potential consequences of a new trade tensions.

Higher borrowing costs effectively curb demand-driven inflation when consumers are flush with cheap money, which is immediately reflected in rising prices. However, the current situation will unfold under a fundamentally different scenario: the increase in customs tariffs will elevate the final cost of US imports, triggering supply-side inflation against the backdrop of waning American consumer activity. The Fed’s traditional monetary tools, such as raising interest rates, will prove ineffective in curbing this type of inflation and may instead further slow the already faltering economy. In this context, the Fed will likely need to adopt a more assertive dovish stance to stimulate the real sector’s revival in the new environment.

Tomorrow’s White House statement may hold various surprises, and market reactions remain unpredictable. Similarly, it's unclear whether the Fed will ease policy or stay restrictive to fight inflation. What can be said with certainty is that any announcement will likely trigger high volatility across all segments of the financial markets.

From a technical perspective, EURUSD exhibited a sharp rally in early March, surpassing the 1.0540 level, which remains untested since. Currently, the pair has exhausted its upward momentum and is attempting to consolidate at the new support level of 1.0740.

If tomorrow’s news provides a strong bearish catalyst and the pair breaks below this support, EURUSD will likely decline decisively to retest the 1.0540 level.

The overall recommendation is to sell EURUSD if the level of 1.0740 is broken.

Profits should be taken at the level of 1.0540. A Stop loss could be set at the level of 1.0950.

The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.