• The dollar soared to a two-year high against its peers on Thursday.

• Markets are now pricing 45-bps Fed rate cuts in 2025.

• Data revealed an unexpected drop in US unemployment claims.

The EUR/USD price analysis shows the euro finding its feet after a collapse in the previous session to new lows. The currency dropped on Thursday as the dollar rallied amid expectations of a gradual pace for Fed rate cuts this year. At the same time, market participants are preparing for the impact of Trump’s likely policy changes.

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The euro had a red day on Thursday as the dollar soared to a two-year high against its peers. This move extended last year’s rally after the Fed announced a drop in projected rate cuts this year. Fewer rate cuts mean interest rates will remain at restrictive levels longer. On the other hand, the European Central Bank is cutting rates to spur economic growth in the fragile Eurozone economy. 

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Markets are now pricing 45-bps Fed rate cuts in 2025. Meanwhile, the European Central Bank might lower interest rates by 100-bps this year. Therefore, the ECB will be more aggressive, hurting the euro. 

Moreover, analysts believe the US economy will shine this year under Trump’s administration. His policy proposals on tax cuts and tariffs will likely boost demand in the US. However, they will pressure other major economies like the Eurozone. 

The dollar also rose after Thursday’s data revealed an unexpected drop in US unemployment claims, which indicated a resilient labor market.

EUR/USD key events today

EUR/USD technical price analysis: Rebound after hitting the 1.0250 support

On the technical side, the EUR/USD price has found support at the 1.0250 level and is bouncing higher. However, it trades well below the 30-SMA, indicating a bearish move. At the same time, the RSI trades in bearish territory below 50. Therefore, the price might only pull back to retest the nearest resistance level before continuing its collapse. 

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A surge in bearish momentum led to a break below the 1.0351 support level. This move came after bulls attempted a takeover by breaking above the 30-SMA. However, they failed to go past the 1.0450 resistance level. Consequently, bears emerged to push the price lower. 

The current rebound might pause at the 1.0351 level, the nearest resistance. At the same time, EUR/USD might revisit the 30-SMA before resuming its downtrend.

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