Euro (EUR) vs US Dollar (USD) continued to trade higher on news that reciprocal tariffs does not comes into effect immediately but sometime in 1 Apr. The 6weeks+ push suggests that Trump may want to leverage on the threats to open up negotiations with some trade partners. The delay and hopes of Ukraine peace dividend is frustrating EUR shorts. Last seen at 1.0478 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Negotiation process can be positive to EUR

"Daily momentum turned mild bullish though rise in RSI moderated. Resistance at 1.05, 1.0540 levels. Break-out puts next resistance at 1.0570 (38.2% fibo retracement of Sep high to Jan low, 100 DMA). Support at 1.0390 (21, 50 DMAs), 1.03 levels."

"The peace talk remains in early stages and the phone call (between Trump and Putin) did not involve Ukraine or Europe. While the negotiation process is not likely to be smooth, we believe progress on this front is a positive start. It can even be a strong positive factor that overwhelms other EUR-negative factors, which were more or less in the price (stagnant economy, dovish ECB), depending on how the peace deal takes its form."

"We have turned neutral on EUR outlook (from bearish), looking to initiate buy on dips (at better levels). That said, we still caution for the risk of reciprocal tariff on EU, that may come within weeks even though effective data can be in Apr. Such announcement may undermine EUR."