The EURUSD exchange rate continued its bullish run with a post-tariff rally on Thursday.
EURUSD – Daily Chart
The latest surge in the euro drove the price above the 1.10 level and bulls now target the 1.20 mark.
The currency market may be quiet on Friday as traders await the US non-farm payrolls job report. There is a chance that it can also add to euro gains after the DOGE-related job terminations of US federal workers.
Layoffs announced by employers in the US surged in March to their highest level since the pandemic as the government purged federal workers and contractors to cut spending. Global outplacement company Challenger said on Thursday that planned job cuts increased 60% to 275,000 last month, the highest level since May 2020.
Around 497,000 layoffs were announced in the first three months of the year, the highest since the first quarter of 2009, when the economy was at the end of the pandemic recession. More than half of the job cuts were in Washington D.C., highlighting the federal job cut effects.
On the technical side, the Relative Strength Index (RSI) indicator surged to 72 in the EURUSD which hints at overbought conditions. That can also offer the potential for a final leg higher as bears back away.
The US dollar struggled against most other major currencies, particularly the Japanese yen, the euro, the British pound, and the Swiss franc, after Donald Trump announced a minimum 10% tariff on imports. Traders now expect an economic backlash against the United States. Despite this, the euro rally may be slightly misguided as Europe will see its own economic fallout. For example, the tariffs on the EU will cover 25% of Ireland’s American exports and could result in multibillion-euro losses in trade in the short term, according to a major Irish business group.
This is a big opportunity for currency traders as the tariff situation could see extended moves and volatility over the coming months as tariffs feed into economic indicators.
