EUR/USD price holds near $1.1745 as trade deal talks and Fed outlook shape FX sentiment
EUR/USD consolidates near 1.1745 as EU–U.S. trade talks and Fed minutes take focus
The euro is holding steady near 1.1745 in Tuesday’s session, gaining 0.30% on the day, as traders digest upbeat Eurozone data and focus on a potential breakthrough in trade negotiations between the European Union and the United States. With momentum pausing just below the psychological 1.18 resistance, the pair is consolidating after a strong June rally.
Highlights
- EUR/USD trades near 1.1745 as EU accelerates talks to finalize a trade agreement with the U.S.
- Retail sales in the Eurozone rise 1.8% YoY in May, beating consensus expectations
- Fed rate cut odds drop below 5% after strong U.S. jobs data, FOMC minutes due Wednesday
However, near-term direction remains tied to developments in transatlantic policy and shifting expectations around U.S. interest rates.
EU–U.S. trade deal prospects and retail data support euro
The shared currency has been buoyed by reports that the European Union is aiming to conclude a preliminary trade deal with the U.S. this week. The agreement would help the EU secure a 10% baseline tariff rate beyond the August 1 deadline, while exempting sensitive sectors such as aviation and spirits. The move is seen as constructive for the euro, especially as investors seek clarity on broader trade frameworks ahead of a volatile summer calendar.
EUR/USD price dynamics (Source: TradingView)
In parallel, Eurostat data released Monday showed that Eurozone retail sales rose 1.8% year-on-year in May, beating market expectations of 1.2%, though monthly sales declined 0.7%. The report suggests that consumer demand remains relatively healthy across the bloc, providing additional support for the euro against a stronger dollar backdrop.
Dollar buoyed by jobs data as rate cut bets fade
The dollar remains resilient following Friday’s robust U.S. labor market report, which showed continued strength in employment metrics. Market participants have slashed odds of a July rate cut from 25% to below 5%, according to the CME FedWatch tool. Traders will now turn their attention to the release of the Federal Reserve’s June meeting minutes, which could shed light on how officials are assessing inflation and growth risks ahead of the next policy meeting.
Previously, we highlighted that EUR/USD had entered a consolidation phase below 1.18 following its bullish run in Q2. The pair continues to respect its broader uptrend structure, with price compressing into a key decision zone near 1.1730. A confirmed breakout above 1.1785 would expose upside targets toward 1.1835 and 1.19, while a breakdown below 1.1700 could shift bias back in favor of the dollar.
