On the evening of Monday (February 17th), the EUR/USD exchange rate is currently fluctuating around 1.0470 and has not been able to break through further. The market's focus remains on the impact of US President Trump's plan to impose tariffs on European cars, especially the potential pressure this measure may bring to the eurozone economy.

Trump announced last Friday that he will impose tariffs on imported cars around April 2nd and also plan countermeasures against the European Union. The market generally believes that Germany, Japan, and South Korea will be the main victims of this tariff policy, as these three countries are the main sources of US car imports. According to OEC data, the value of Germany's automobile exports to the United States reached 24.3 billion US dollars in 2023.

At last weekend's Assiom forex financial conference in Italy, European Central Bank Governor and Bank of Italy Governor Fabio Panetta pointed out that the net impact of tariffs on eurozone inflation will be "limited, even slightly negative".

Panetta further proposed that the main risk for the eurozone remains the possibility of inflation falling below the 2% target in the medium term, which means the European Central Bank may continue to maintain a relatively loose monetary policy. This statement indicates that market concerns about the economic outlook of the eurozone have not completely dissipated, and the European Central Bank's monetary policy remains dovish.

Technical analyst interpretation:

After a period of consolidation, the euro/dollar is still hovering around the key resistance level of 1.0500, which is crucial for the trend of the euro. From a technical perspective, the current exchange rate trend remains above the 50 day moving average, which is around 1.04, providing support for bulls. The 50 day moving average is usually seen as a guide to a medium-term trend, and if the price can remain above it, it indicates that the current market is still bullish.

In addition, the 14 day Relative Strength Index (RSI) is currently approaching 60.00. If the RSI further breaks through this level and remains above the region, it may provide stronger upward momentum for the euro/dollar. A breakthrough in RSI usually indicates a change in market sentiment, and a breakthrough of 60.00 suggests that bullish forces may further strengthen, driving the exchange rate upwards.

In terms of support levels, the low point of 1.0285 on February 10th will be a key support area for the euro/dollar. If the price falls below this support level, it may trigger further pullback. It should be noted that the current upward momentum is still relatively limited. If the price continues to consolidate around 1.0500, it may form a sideways oscillation pattern in the short term.

On the other hand, the resistance level of 1.0630 is also very important. This price range is the high point on December 6th last year. If the price breaks through this resistance level, it may mean greater upward space, especially after breaking through the 50 day moving average.

Overall, the current technical performance of the euro/dollar shows some upward potential, but breaking through the psychological barrier of 1.0500 still requires more upward momentum support. If RSI continues to rise and remains above 60, the likelihood of breaking through key resistance levels will increase. On the contrary, if the price falls below 1.0285, it may retest lower support levels.

Conclusion:

The euro/dollar shows potential upward momentum on the current technical level, but its process of breaking through key resistance may be relatively slow. Pay attention to the breakthrough of the resistance level of 1.0500 and whether the RSI can maintain above 60. If the breakthrough is successful, it may trigger a new upward trend; If the price fails to break through, there may be a pullback, testing lower support levels. During this process, the policy dynamics of the European Central Bank and changes in the US economy will have a significant impact on the exchange rate trend.