As we move deeper into 2025, the global economy is being shaped by rising trade tensions, policy shifts, and currency fluctuations. While the economic landscape has recently been turbulent, there are signs of stabilization — offering traders new and exciting opportunities in the markets.

Global Trade & Tariffs: A Year of Economic Realignment

On April 2, 2025, President Trump declared “Liberation Day,” enforcing sweeping tariffs across a wide range of imports. This includes a 10% baseline tariff on all foreign goods and a massive 145% tariff specifically on Chinese imports. Markets reacted quickly — global indices experienced a sharp drop and investor confidence took a hit.

In the wake of these policies, organizations like the WTO have revised their forecasts, predicting a significant decline in global trade activity. The WTO expects merchandise trade to drop 0.2% in 2025 (down from its earlier 3.0% growth projection), while the IMF has forecasted global growth to slow to 2.3%.

The economic decoupling between the U.S. and China is now well underway, with U.S.-China trade reportedly falling over 80% this year. Meanwhile, countries such as Canada, Mexico, and EU nations are facing retaliatory tariffs, compounding the economic uncertainty.

 Volatility Cooling Off: The Calm After the Storm

The initial tariff shocks brought extreme market volatility — sharp moves, unexpected gaps, and wide spreads across forex and indices. However, we’re now seeing a shift.

Volatility is beginning to normalize across major asset classes. The erratic price swings seen in the early days of the tariff announcements are slowing down. Liquidity is gradually returning, and with more measured market reactions, this transition phase is offering traders exceptional opportunities.

Ranging markets are beginning to break, new trends are forming, and the reduced volatility makes for better entry points, tighter risk management, and cleaner setups. For traders, this is a golden window to trade with more clarity and conviction.

 EUR/USD Fundamental Outlook

The EUR/USD has shown resilience in recent weeks.  Many might think that the chart now needs a correction to the downside to fill the gaps however, things in America are improving, but this does not mean that the currency is strengthening just yet. This makes us look at the buy setups on EURUSD especially since the tariffs are still in effect. ECB Policy: The European Central Bank is expected to cut rates by 25 basis points in response to slower growth and rising uncertainty. While this could temporarily weaken the euro, the market seems to have priced much of this in.

• US Dollar Weakness: The USD is under pressure, with the ICE Dollar Index seeing its worst start to a year since 1995. Concerns over the U.S. economy, paired with reduced confidence in the Fed’s ability to curb inflation amid trade shocks, have led to broad USD selling.
• Eurozone Stability: Despite rate cut expectations, the euro is holding up relatively well due to stabilizing inflation data and steady employment figures across Germany, France, and the Netherlands.

Together, these factors are setting the stage for a more directional EUR/USD market, with bulls eyeing key resistance levels and bears watching for any deeper pullbacks tied to economic softness.

Final Thoughts: Stay Ready, Stay Adaptable

The normalization of volatility, paired with clearer macroeconomic themes, means the markets are moving into a more tradable phase. For traders, the chaos of early 2025 is giving way to clarity and structure — two key ingredients for success.

At Propel Capital, we believe this is a time to lean into preparation, patience, and precision. Follow the fundamentals, manage risk wisely, and take advantage of the many opportunities this transitional period offers, it is not over, but use this time to sharpen your tools and prepare for the next set of increased volatility. You have officially made it through some of the toughest market conditions you will face in your trading career.