EUR/USD, FTSE 100 Forecast: Two trades to watch

Fiona Cincotta
Article By: ,  Senior Market Analyst
Multiple Euro bank notes in 20€, 50€ and 100€

EUR/USD falls on renewed trade tariff fears

  • Trump considers +2.5% universal tariffs
  • Tariff fears drive EUR more than the expected ECB rate cut
  • EUR/USD falls towards 1.04

EUR/USD is heading lower towards 1.04 as the pair looses traction amid the USD strength at the start of the European session.

U.S. Treasury Secretary Scott Bessent said on Monday he is pushing for universal tariffs on imports to start at 2.5% and rise gradually. Trump said he wants to enact across the bord trade tariffs much larger than 2.5% but hasn't yet decided on the level.

Following Trump's comments, and renewed tariff fears, the balance of risk has shifted back to the downside for the euro.

The latest trade comments are more relevant for directing the EUR than the widely expected 25 basis point cut by the ECB on Thursday. The central bank is also expected to signal further rate cuts, but this is widely expected and, therefore, could have a limited impact on the market.

Attention will also be on the FOMC decision tomorrow, where the Fed is expected to leave rates unchanged. The US economy has been a Goldilocks state since the previous Fed meeting, which supports the argument for patience. However, slowing underlying inflation keeps the bias towards cuts down the line. A pause from the Fed also allows them to see what policies Trump implements.

US durable goods orders and consumer confidence will be released later today.

EUR/USD forecast – technical analysis

EUR/USD has recovered from 1.0177 low, rising above the falling trendline dating back to October and the 50 SMA before, running into resistance at 1.0530 and correcting lower.

Buyers will need to rise above 1.0530 to create a higher high and exceed the bullish recovery towards 1.06.

Support can be seen at 1.04 and 1.0330, the November low. Below here, 1.0777 comes back into play.

eur/usd forecast chart

Get our exclusive guide to index trading in 2025

FTSE rises, shrugging off the tech rout

  • FTSE relatively unscathed due to a lack of tech stocks
  • UK shop prices fell 0.7% in January
  • Trump mixed messages on trade tariff  keep investors on edge
  • FTSE consolidates above 8500

The FTSE recovered from modest losses yesterday but has broadly emerged unscathed from the tech rout, given the index's lack of tech stocks. There are signs of a cautious recovery in the broader market. Yesterday's sell-off appears to have been overdone. Nvidia is rising by 5%, while the Nasdaq trades are 0.3% higher.

The Nasdaq closed 3.4% lower, and Nvidia shed 16.9%, equating to $600 billion in value, on Monday after the Chinese start-up Deep Seek unveiled a cheaper, more efficient AI model, calling into question big tech's huge investment into AI infrastructure.

Retailers will be in focus after data showed prices in UK shops fell again in January, dropping 0.7% after a 1% fall in December. This shows that the disinflation process is still in play. However, food costs rose 0.5%, the fastest monthly pace since April last year.

Retailers and supermarkets are pushing higher, with Sainsbury and Tesco trading up 1.9% and 1.7% respectively.

Miners feature heavily on the looser board amid renewed trade tariff concerns. Trump’s talk of universal tariffs comes after Trump appeared to be taking a less hostile approach towards China trade tariffs last week. There are certainly mixed messages coming from Trump regarding trade tariffs, which keep the market on edge. Riot Tinto and Anglo American trade 0.5% lower.

FTSE forecast - technical analysis

The FTSE is consolidating above 8500. The price briefly spiked down to 8430 yesterday. The long lower wick on yesterday’s candle suggests that there was little selling demand at the lower levels, and the price returned to familiar levels.  The RSI is above 50 and pointing higher which keeps buyers hopeful of a break to the upside.

Buyers will look to rise above 8590 to rise to fresh all-time highs.

Support is at 8580, the May high. A break below here opens the door to 8400.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

© City Index 2025