EURUSD Surges on Tariff Comments – Watch These Key Levels

EURUSD bulls are making moves, but can they confirm a bottom, or is this just another false breakout?

Catch all the details in today’s video, including the latest updates on the US Dollar Index (DXY).

EURUSD surged on Monday following reports that Trump wouldn’t enforce tariffs immediately.

This rally coincided with the DXY breaking below its September trend line at 108.80, a level I highlighted in Friday’s Weekly Forex Forecast.

For the euro, the key remains the same as after the January 6th close above 1.0350.

Bulls need a confirmed daily and weekly close above 1.0350 to initiate a bottoming process and target 1.0460.

While we’ve seen one daily close above 1.0350, it’s not enough to confirm a bottom just yet.

Take a look at the price action from January 6th to 7th as an example.

Adding to the challenge, Trump’s off-the-cuff tariff comments are causing sharp US dollar fluctuations of half a percent or more each time he speaks, making this week especially challenging for traders.

Still, we need to assess the charts as they are.

Right now, the US dollar is breaking down while EURUSD reclaims 1.0350.

If EURUSD bulls can hold 1.0350 as new support this week, the next stop could be 1.0460.

If not, a sustained break back below 1.0350 on higher time frames could open the door to 1.0200 and possibly 1.0090.

Any bearish scenario for EURUSD hinges on the DXY finding support near 108.00.

If not, we could see the dollar index test 107.50 and potentially the December imbalance at 107.18.