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25.02.2025 10:27 AM
EU Prepares Countermeasures Against Trump's Actions

The euro and the pound remain under pressure against the U.S. dollar, yet the market has not seen any significant correction so far. While the Asian session's gains were quickly erased yesterday, there has been no clear continuation of the bearish trend in risk assets within the forex market.

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As the U.S. prepares for a potential trade war, the European Commission has stated that it will react quickly and decisively should President Donald Trump impose unjustified measures following his latest warning regarding the EU's digital market regulations. Brussels reaffirmed its commitment to defending European businesses and interests, utilizing all available tools, including filing cases with the World Trade Organization (WTO).

At the same time, concerns are growing in Europe about the economic impact of escalating trade disputes. Experts warn that further trade barriers could slow global economic growth and increase inflation. Some European policymakers are advocating for closer cooperation with other nations to counterbalance U.S. pressure. This includes considering alternative trade agreements and strengthening ties with emerging markets.

Trump's latest trade warning follows his signing of a memorandum on Friday, which stated that any penalties imposed on U.S. companies in the future could lead to tariffs and other retaliatory measures aimed at offsetting potential damage to the U.S. economy.

In an accompanying directive, the U.S. president strongly criticized the EU's Digital Markets Act (DMA), which regulates market dominance and anti-competitive practices, as well as the Digital Services Act (DSA), which governs online content moderation.

"We are concerned about the broad interpretations reflected in the memorandum and unilateral actions that could provoke retaliatory measures," said Thomas Regnier, a European Commission spokesperson, on Monday. He reiterated that the EU remains open to cooperation with the U.S. and other partners to find global solutions to shared challenges. However, the EU will act swiftly and decisively to protect its rights and regulatory autonomy against unjustified U.S. actions.

Renier also emphasized that the DSA and DMA are applied fairly and without discrimination.

In recent years, major U.S. tech companies have faced substantial fines from EU regulators, including over $8 billion in penalties against Google (Alphabet Inc.) and a €13 billion back tax order for Apple Inc. in Ireland.

Under the DMA, companies such as Alphabet, Apple, Amazon, Meta (Facebook), ByteDance (TikTok), and Microsoft are now subject to new restrictions on their market behavior, with penalties for violations reaching up to 10% of their global revenue.

EUR/USD Technical Outlook

Buyers need to reclaim the 1.0490 level to establish upward momentum. Breaking above this level would allow EUR/USD to test 1.0530, with further targets at 1.0560 and 1.0590. However, sustained growth beyond these levels would require support from large institutional players.

If the pair declines, major buying interest is expected around 1.0450. Should buyers fail to defend this level, a move toward 1.0400 or even 1.0360 could become a more likely scenario.

GBP/USD Technical Outlook

For the British pound, buyers need to break through the 1.2650 resistance level to gain upward traction. A successful breakout would pave the way for 1.2690, though further upward movement may face strong resistance. The final target for bulls remains at 1.2735.

If sellers regain control and push the pair below 1.2610, a bearish breakout could send GBP/USD toward 1.2565, with a potential further decline toward 1.2520.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2025
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