EUR\/USD ended the week with losses exceeding 0.70%, closing Friday’s session down 0.10% at 1.1688, falling below the 1.1700 level. This positions it for a potential dip to test support levels, as the US dollar experiences its best week in four months.<\/p>\n
A risk-off mood was spurred by US President Trump’s tariff expansion plans, targeting commodities like copper, with a possible letter impending to the European Union. The economic schedule was sparse, featuring appearances from Federal Reserve officials and Germany’s Wholesale Prices data release.<\/p>\n
The Euro faced pressure due to Trump’s tariff discussions with the European Union. Chicago Fed President Goolsbee noted tariffs complicate economic clarity, possibly delaying rate cuts. In the Eurozone, ECB officials expressed mixed views on monetary policy. ECB member Panetta suggested potential easing due to intensified downside risks. Germany’s Wholesale Prices rose by 0.2% in June, reversing a previous decline.<\/p>\n
Technically, EUR\/USD broke below 1.1700 but remains above the 20-day SMA at 1.1662, indicating potential further declines. Immediate support is seen at the 20-day SMA, 1.1650, and the 50-day SMA at 1.1464.<\/p>\n
The Euro is the second most traded currency, representing 31% of all foreign exchange transactions in 2022.<\/p>\n
With EUR\/USD falling below the 1.1700 barrier and ending the week with a noticeable setback, we\u2019re starting to see momentum shift towards a clearer downside. The move below that round number wasn\u2019t just psychological\u2014technicals seem to be reinforcing it. The short-term trajectory is tilting lower, as long as price action remains beneath the 20-day moving average. The 1.1660 region, marked by that average, should be considered the first area to monitor. If that gives way, the next standout level lies around 1.1650. Beyond that, the 50-day moving average nearer to 1.1460 poses a more substantial downside objective.<\/p>\n
Traders would do well to treat last week\u2019s US dollar rally not as a one-off, but as part of a broader shift. The surge in demand followed a combination of tight monetary language from Federal Reserve representatives and a return of defensive sentiment after renewed trade friction signals from Washington. Goolsbee\u2019s remark that tariffs cloud the economic picture struck a chord. It introduces an extra layer of uncertainty around US policy timing\u2014particularly the timing and scale of any future interest rate adjustments. That lack of clarity naturally reduces conviction in risky positions, raising demand for safe-haven currencies like the dollar.<\/p>\n
On the European side, officials spoke with inconsistent tones, which didn\u2019t help the Euro regain a sense of direction. Panetta opened the door to possible easing by acknowledging looming risks to the downside. Though his view isn’t universally held within the ECB, his input introduces a doubt traders can\u2019t easily ignore. With growth readings still uninspiring, and price indicators offering little assurance, we\u2019re avoiding long Euro exposure in the near term. Germany\u2019s wholesale price uptick, coming in at just +0.2%, is still meagre and does more to highlight subdued inflationary pressures than to suggest building momentum.<\/p>\n
Volume and participation were relatively thin over the past week due to the lighter economic calendar, but that changes soon. More US data is on deck, and depending on how the dollar trades into those releases, reaction could be asymmetric. The greenback\u2019s recent strength was its strongest in four months, meaning it\u2019s already built in some degree of optimism. Any letdowns through economic surprises could cause an outsized counter-reaction.<\/p>\n
What we\u2019re seeing in EUR\/USD isn\u2019t just a test of one level\u2014it\u2019s the early phase of a pattern that will feed on how central banks balance inflation concerns with weak data. With nearly a third of global FX transactions touching the Euro, it remains exposed to wider market winds. How far sentiment against it develops may depend less on Eurozone performance and more on where the US dollar chooses to go from here.<\/p>\n
Market participants operating with leveraged positions might want to reduce exposure near short-term resistance points or consider tightening stops around current moving averages. This helps avoid unnecessary drawdowns in what may be a more corrective phase for EUR\/USD. There’s little benefit in fighting momentum as it’s building, particularly with news flow unlikely to turn immediate sentiment on its head in the very short term.<\/p>\n
Positioning becomes especially delicate if the technicals align with further macro themes pointing in the same direction. Put simply, we\u2019re not buying dips here\u2014we\u2019re watching for continuation.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD drops below 1.1700 amid tariff concerns, mixed ECB signals, and strong US dollar performance.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-26336","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/26336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=26336"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/26336\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=26336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=26336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=26336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}