EUR/USD Price Forecast - EUR Holds Near 1.18 as Tariff Shock and Hot PCE Pin the Pair

EUR/USD Price Around 1.18 Under Tariff Shock And Fed Repricing

Tariff Headlines And Why EUR/USD Holds Near 1.1780

The EUR/USD rate has slid from the January zone around 1.2093–1.2095 to roughly 1.1780, a fall of just over 2.8% in a few weeks. Price keeps gravitating toward 1.1800, with bounces toward 1.1850 sold and dips into 1.1750 quickly bought. That magnet behaviour reflects a market that has digested a Supreme Court ruling, a fresh 15% tariff plan and a softer US growth print, but still recognises that the broader up-move from 2025 is not yet fully broken. The pair is correcting, not collapsing, and the 1.18 axis is where both sides are currently testing conviction.

Supreme Court Ruling, New 15% Tariffs And Dollar Support

The legal shock arrived first. A 6–3 Supreme Court decision shut down last year’s emergency global tariff framework and initially looked negative for the USD because it removed one of the most aggressive trade levers. That could have pushed EUR/USD further above 1.20. Instead, the follow-up announcement flipped the picture. The President moved to impose new 15% tariffs using a different legal route, capped at 150 days unless Congress extends them. A 15% blanket rate hanging over imports into the USD area forces companies to reprice supply, margins and investment plans in real time. That kind of uncertainty has two effects: it supports the dollar as a liquid safety asset while also compressing risk appetite in Europe, leaving EUR/USD stuck instead of trending.

US Growth Slows To 1.4% While Core PCE Climbs Back To 3.0%

The macro mix on the US side is contradictory. Fourth-quarter GDP printed at 1.4% annualized versus a 3.0% consensus and a prior quarter near 4.4%. A 43-day government shutdown dragged on consumer activity and fed straight into that miss. Under cleaner conditions a 1.4% outcome against a 3.0% expectation would normally weaken the USD and give EUR/USD more room to extend higher from the 1.20 region. Inflation is the obstacle. Headline PCE is sitting at 2.9% versus 2.8% previously, and core PCE has moved back to 3.0% from 2.8%. The monthly core pace at 0.4% instead of 0.3% underlines that disinflation is not linear. With consumer inflation at 2.4% in January but the core metric at 3.0%, the Fed cannot commit to a fast easing path. That keeps the USD stronger than a 1.4% GDP print alone would justify and prevents EUR/USD from trending cleanly away from 1.18.

Fed Curve Now Pricing Only Two Cuts In 2026 And Lifting The USD Leg

Rate markets have shifted toward a tighter profile for the USD. Instead of three 25-basis-point cuts in 2026, pricing has converged around only two, one around June and one in October. The dollar index responded with a weekly bullish candle, reversing part of the weakness that allowed EUR/USD to reach the 1.20 handle earlier in the year. Every cut that disappears from the curve raises the opportunity cost of being short dollars and long EUR/USD. With core PCE at 3.0%, GDP at 1.4% and tariffs at 15% on the table, the bar for aggressive easing is high. Upcoming remarks from Waller, Cook, Bostic and Collins will either cement or soften that profile. As long as markets see just two cuts, rallies in EUR/USD toward 1.1856–1.1918 are likely to meet supply.

Euro Structure: Three-Month Advance Now Testing 1.1746–1.1775 Support

On the EUR side the story is dominated by structure. From late 2025 through January 2026, EUR/USD advanced for roughly three months and topped just above 1.20 before rolling over. The pullback of more than 2.8% has carried price back into a dense support zone anchored around 1.1746–1.1775. That band includes the objective yearly open, the 2025 high-week close, the 2025 high-close and the February opening-range low. Below that, the next important area sits around 1.1672–1.1633, and the medium-term invalidation of the bullish structure lies at 1.1598. A weekly close under 1.1598 would signal that the 2025 up-move has likely completed and that EUR/USD is transitioning into a deeper corrective leg toward the 52-week moving average near 1.1518 and the 1.1497 zone. For now that has not happened, which means the euro is under pressure but the longer-term recovery is still technically alive.

Short-Term Trading Zone: 1.1750–1.1850 Defines The Current Battlefield

On the shorter horizon the range is very clear. Support levels at 1.1774 and 1.1760 have already seen buyers step in as EUR/USD backed off from 1.18. Resistance lines cluster at 1.1805, 1.1828, 1.1856 and 1.1887. Each attempt to push through that block has been faded so far. The result is a narrow band between roughly 1.1750 and 1.1850, with a slight downside tilt: offers are showing a little earlier above 1.18, while bids remain firm above 1.1750. Over the higher timeframe the weekly levels are equally precise. Resistance at 1.1917–1.1918 marks a prior swing high and a measured extension of the 2022 move, while 1.2020 lines up with the 38.2% retracement of the 2008 decline and a key structural cap. Until EUR/USD can close above 1.1918 and then 1.2020, any bounce remains a move inside a corrective phase rather than confirmation that the next leg toward 1.2218–1.2350 is underway.

Trend Channel, 50-Day WMA And Fading Momentum On EUR/USD

Despite the recent slide, EUR/USD still trades inside an ascending channel that has defined the 2025–2026 climb. Price sits above the 50-day weighted moving average and the Supertrend configuration on the three-day chart remains in a positive state, which means the broader direction is still up as long as 1.1598 holds. What has changed is the slope of the move. Monthly indicators show divergence: price set a higher high around 1.2095, but momentum failed to confirm. The weekly candle now rests just above 1.1746–1.1775 and carries a clear loss of thrust. MACD lines have rolled over and are flattening, consistent with an inflection region. Either that zone holds and the channel resumes toward 1.1917–1.2020, or a weekly close beneath 1.1746 opens a path toward 1.1672, 1.1633 and ultimately 1.1598.

Cross-Asset Signals From Oil, Gold, Equities And Crypto For EUR/USD

The wider market context sets the tone for EUR/USD risk. WTI crude has pushed to new six-month highs as probabilities of an open confrontation between the US and Iran climb, with prediction markets assigning a double-digit chance of conflict within a week and above 50% by the end of March. That backdrop typically supports the USD and the yen while putting pressure on energy-importing blocs such as the euro area through higher input costs. Gold has recovered above $5,000 per ounce, with spot near $5,071 and April futures around $5,081 after trading within a $4,800–$5,131 range. That move confirms renewed demand for protection against policy error and geopolitical risk. Bitcoin is trapped between about $66,773 and $71,762, holding a critical floor at $61,229, which signals that risk appetite is bruised but not collapsing. Major equity benchmarks such as the S&P 500 are stuck in a 6,800–7,000 band after printing record highs three weeks ago. This combination—firm crude, stronger gold, range-bound equities and a mildly stronger dollar index—leans against a rapid upside breakout in EUR/USD and instead argues for capped rebounds toward 1.1917–1.2020 while this environment persists.

Near-Term Catalysts: Fed Communication, Lagarde And Data On Both Sides

The next wave of movement in EUR/USD will be driven by a tight cluster of policy and data events. On the USD leg, US PPI and the State of the Union speech will shape expectations for both inflation pressure and the tariff path. Another surprise to the upside in producer prices, added to core PCE at 3.0%, would strengthen the case for a slower easing cycle and keep resistance heavy in the 1.1856–1.1918 zone. On the EUR leg, focus shifts to comments from Christine Lagarde and to Euro area inflation releases. If HICP data continue to glide toward 2% more smoothly than US core PCE, markets will start to see a narrower policy gap between the ECB and the Fed, helping EUR/USD defend 1.1746 and attempt another move back toward 1.1917 and 1.2020. If Eurozone data disappoint while the US holds around 1.4%–2.0% growth with 3.0% core PCE, the divergence will favour the USD again and expose the 1.1672–1.1598 pocket.

Key EUR/USD Levels That Will Decide The Next Leg

Price action already maps out the decision points on EUR/USD. The 1.1746–1.1775 band is the defence line for the medium-term bullish case. A weekly close above that cluster keeps the 2025 recovery narrative intact and frames the current move as a correction. A weekly close below 1.1746 would signal a shift toward a deeper pullback, with 1.1672 and 1.1633 as the next reference points and 1.1598 as the level that would formally break the 2025 structure. Beneath 1.1598, attention turns to the 52-week moving average around 1.1518 and horizontal support near 1.1497. On the topside, 1.1856 and 1.1887 are near-term waypoints inside the range, but 1.1917–1.1918 and then 1.2020 are the real tests. A sustained weekly close above 1.2020 would confirm that the consolidation has resolved upward and that the path to 1.2218 and 1.2350 is open again.

Operational View On EUR/USD: Hold Bias With Mild Downside Lean

Taking everything together—EUR/USD around 1.1780, a 2.8% pullback from the 1.2095 high, US GDP at 1.4%, core PCE at 3.0%, a 15% tariff plan, only two Fed cuts of 25 basis points priced for 2026 and a critical support zone at 1.1746–1.1775—the pair does not justify an extreme stance in either direction. Above 1.1746 the configuration points to a Hold bias with a slight bearish inclination: short-term strength into 1.1856–1.1917 is more likely to attract sellers than chase buyers while Fed expectations stay hawkish and Middle East risk supports the USD. A weekly close below 1.1746 would upgrade that mild downside tilt into a cleaner extension toward 1.1672 and 1.1598. Only a break and hold above 1.1917 and then 1.2020 would justify shifting back to a clear medium-horizon buy view aimed at 1.2218–1.2350. Until one of those triggers is resolved, the 1.1746–1.1918 range around 1.18 remains the core zone where the next decisive move in EUR/USD will be shaped.

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