Euro (EUR) jumped post-tariff announcement. Reciprocal tariff rate of 20% on EU was largely in line with street’s estimates. EUR was last seen at 1.0964 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Bearish momentum on daily chart shows signs of fading

"We remain cautious as other tariffs on alcohol (200% tariff), lumber, semiconductors and pharmaceutical drugs may still be forthcoming in the coming weeks. Tariff imposition may still weigh on EUR. Earlier, EU members were considering deploying its anti-coercion instrument, which could lead to restrictions on trade and services, intellectual property rights, foreign direct investment, and access to public procurement. But at the same time, EU is also identifying concessions it is willing to make to secure the partial removal of US tariffs."

"Bearish momentum on daily chart shows signs of fading while RSI rose. Next resistance at 1.1020 levels. Support at 1.0850 (21 DMA), 1.0820 levels (61.8% fibo retracement of Oct high to Jan low). We had earlier shared our bias - look for dips to buy into, considering the emergence of several positive factors, including EU defence spending (supportive of growth), chance that ECB easing may slow and prospects of a complete ceasefire in Ukraine at some point. The rare display of responsiveness and concerted willingness of European leaders to spend on defence gave EUR a fresh boost. More importantly, growth matters."

"While US is a major economic powerhouse, other big nations such as EU (18.4%) and China (16.6%) should not be written off. For EU, massive defence spending can be supportive of growth while in China, there are some signs of tentative economic stabilisation. If US growth slumps as a result of its own doing while growth for the rest of the world holds up, USD may end up weaker. Alongside ballooning US debt, fading US exceptionalism and US protectionism measures, USD as a reserve currency status may even be questioned, leading to a hunt for the next alternative reserve currency. That said, this process may still take time."