The euro has gained close to 0.8% against the U.S. dollar in recent sessions, supported by a fresh wave of bullish sentiment. This upward move accelerated toward the week’s end following remarks from former U.S. President Donald Trump, which sparked renewed interest in the euro as a short-term safe haven and triggered selling pressure on the dollar.
Trade Dispute Reignited
Trump has once again raised the possibility of a trade war with Europe, threatening to impose a 50% tariff on European goods imported into the United States starting June 1. He cited a lack of satisfactory progress in trade discussions as the reason behind this drastic stance.
Since May 15, both parties had agreed to resume technical-level negotiations during a 90-day suspension period, which is set to expire on July 9. However, the recent escalation from the U.S. side suggests that talks may now become more hostile. In response, the EU is reportedly readying retaliatory tariffs of its own.
The European Union has already started reviewing potential tariffs on approximately €100 billion worth of U.S. exports, primarily targeting industrial and agricultural products. Washington’s sharp rhetoric may accelerate the timeline for these countermeasures, raising fears of a full-blown trade conflict.
This shift has moved the spotlight of U.S. trade policy away from China and placed Europe at center stage. European markets have responded with caution, and the euro has attracted safe-haven demand amid growing geopolitical uncertainty.
Meanwhile, the U.S. dollar has shown signs of broader weakness. The DXY index, which tracks the dollar against a basket of major currencies, dropped below the 100-point level, highlighting sustained bearish pressure as the week draws to a close.
With volatility increasing across European markets, the euro is currently benefiting from investor risk aversion. If the trade standoff intensifies, demand for the euro may continue to rise, especially if markets expect the U.S. economy to bear the brunt of the fallout.
EURUSD analysis May 25th 2025
Uptrend Structure: Since early March, the EUR/USD pair has followed a strong bullish trend marked by higher highs and higher lows. While minor corrections have occurred along the way, they’ve been shallow and short-lived. Support has consistently held firm, keeping buyers in control. The recent crossover of the 100-period moving average above the 200-period MA is a strong confirmation of the prevailing upward momentum.
RSI Indicator: The Relative Strength Index remains above the 50 level, signaling ongoing bullish momentum. If the RSI climbs further away from neutral territory, it could amplify buying interest in the pair.
MACD Outlook: The MACD has issued a clear bullish crossover, with the MACD line moving above the signal line. The histogram has also turned increasingly positive, reflecting a momentum shift favoring the bulls. Together, these signals point toward a continuation of the uptrend in the near term.
1.15000 – Major Resistance: A psychological and technical barrier. A decisive break above this level could pave the way for further upside in EUR/USD.
1.11000 – Key Support: Currently acting as a base of consolidation. A breakdown here might weaken the bullish bias and open the door for a trend reversal.
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