What’s happening with EUR/USD, as the euro approaches dollar parity

The euro is nearing a dollar parity once again, showing weakness as Donald Trump’s trade war continues with worldwide tariffs.

As of this writing, the EUR/USD forex pair is trading at $1.03, revisiting levels previously seen in 2022. Back then, the euro traded below a 1:1 ratio against the US dollar after Russia’s full-scale invasion in Ukraine.

EUR/USD technical analysis

Notably, the bearish outlook seen at that time, caused by the energy crisis that followed the invasion, again shows its face in the EUR/USD price chart.

The weekly relative strength index (RSI) marks 37.63, signaling weakness, while the daily RSI is neutral at 43.33. Meanwhile, the euro is trading below the 50-week exponential moving average (EMA), currently at $1.04.

Technical indicators suggest it is a bear market for Europe’s currency against the United States forex dominance. Nevertheless, an FXStreet analysis eyes the current area as a potential support that could still attract short-term technical buyers. Failing to make this are support could lead EUR/USD to as low as $1.02 in the following days.

Fundamental analysis on the Euro vs. the US dollar

Following up with the analysis, the FXStreet analyst believes Eurozone Sentix data could shed a light into what is next for the euro against the dollar for this week.

Moreover, Christine Lagarde’s speech today could boost investors confidence, as the European Central Bank (ECB) president addresses concerns related to Donald Trump’s threats on imposing tariffs to the European Union.

As Bloomberg reported this morning, “the euro has been dragged lower by speculation that the US will restrict trade with the region’s export orientated economies.” This would be done with the intention of forcing the ECB to cut interest rates more aggressively, weakening the euro.

Therefore, Lagarde’s speech is a key event to set the pace for the EUR/USD pair this week. Nevertheless, Donald Trump said tariffs on the European Union will “definitely happen,” increasing concerns of investors regarding Europe’s financial future.

At the same time, the EU has consistently shown an unfriendly approach to technological and financial innovations like blockchain, while the United States is embracing them under Trump’s administration. For example, Christine Lagarde is “confident” the ECB will not add Bitcoin (BTC) to its reserves — a financial strategy that the US is considering.

On a related note, cryptocurrency investors on X have commented on the matter, saying that upcoming MiCA-compliant EUR stablecoins, as Finbold reported, will “be another US dollar stablecoin,” speculating that the euro will eventually reach a 1:1 parity with the USD.