EUR/USD price slips below $1.17 as bullish structure weakens amid Fed uncertainty and tariff risk
EUR/USD breaks trendline, tests support as traders eye Fed policy and global trade risks
EUR/USD is retreating from recent highs, slipping to 1.1715 after failing to sustain its breakout momentum from June. The currency pair has fallen below key short-term moving averages and now sits at the edge of a critical support zone between 1.1662 and 1.1722.
Highlights
- EUR/USD drops to 1.1715, breaching mid-June trendline and eyeing 1.1662 support zone.
- FOMC minutes and U.S. tariff news lifted the euro temporarily, but upside remains capped below 1.1750.
- Momentum turns bearish with RSI at 36 and MACD showing deepening negative divergence.
Technically, the breakdown beneath a rising trendline that had guided the rally since mid-June signals a weakening bullish structure. Traders are watching closely to see whether this marks the beginning of a broader corrective move or a temporary pause in trend.
Tariff reprieve for EU and dovish Fed tone lift euro temporarily
The euro’s earlier gains this week were driven by a weakening dollar following the release of the Federal Reserve’s June 17–18 meeting minutes. Officials signaled that a rate cut may still be on the table later this year, acknowledging that inflation pressures from tariffs may be modest or short-lived.
EUR/USD price dynamics (Source: TradingView)
The U.S. dollar also softened after President Trump issued tariff letters to eight countries, imposing rates between 20% and 50% starting August 1. Notably, the European Union was not included in this list, helping EUR/USD hold above 1.1730 during the early Thursday session.
EU trade chief Maros Sefcovic added further support to the euro by stating that talks with the U.S. were making “good progress” toward a trade agreement. He noted that the extended deadline gave both parties time to finalize negotiations, which could provide further relief for the eurozone in the coming sessions.
Short-term momentum turns bearish as price tests support
Despite the brief lift, technical indicators now suggest growing downside pressure. The RSI on the 30-minute chart has dropped to 36, while MACD is showing a bearish crossover with deepening negative histogram bars. Price action has failed to reclaim the 1.1750 resistance and is now testing the lower half of the Bollinger Bands. A decisive close below 1.1690 could confirm a momentum breakdown and open the way toward 1.1662 and potentially 1.1600. Conversely, reclaiming 1.1750 would be needed to reset bullish momentum.
In previous EUR/USD coverage, we highlighted that the pair’s strength was tied closely to dollar direction and Fed expectations. With current price now below the uptrend support and momentum indicators tilting negative, the short-term outlook favors further downside unless bulls reclaim the 1.1750 zone convincingly.
