EUR/USD slips to $1.168 as tariffs weigh and ECB tempers cuts
EUR/USD faces renewed downside as U.S. trade pressure and weak ECB outlook weigh on sentiment
The euro price dipped to 1.1680 against the U.S. dollar during Friday’s Asian session as renewed trade tensions and cautious European Central Bank commentary weighed on the common currency. The move follows a rejection from the 1.1850 region earlier this week, with the pair now struggling to hold minor support near 1.1670.
Highlights
- EUR/USD drops to 1.1680 amid rising U.S.-EU trade tension and cautious ECB tone
- Technical rejection from 1.1714 and breakdown below trendline confirm short-term bearish setup
- Key support lies at 1.1650, with 1.1600 and 1.1550 in focus if sellers remain in control
Traders remain focused on the evolving U.S.-EU tariff situation, which has emerged as a fresh risk for euro bulls.
U.S. President Donald Trump stated that the European Union would receive new tariff rate notifications “today or tomorrow,” part of a broader wave of trade actions that included 50% duties on copper and tariffs on Brazilian and Canadian goods. The possibility of elevated trade frictions with Washington has raised concerns over export-driven sectors across Europe. Analysts warn that the euro may face further pressure if policy uncertainty escalates or trade flows are disrupted.
At the same time, ECB policymakers are dialing back expectations of further interest rate cuts. Governing Council member Robert Holzmann said Wednesday that current borrowing costs may already be providing sufficient stimulus, while fellow ECB official Joachim Nagel highlighted ongoing uncertainty as justification for a cautious approach. The tone suggests the ECB may prefer a wait-and-watch stance, which could help cushion the euro if trade-related volatility persists.
Momentum shifts lower as EUR/USD tests support
On the technical front, EUR/USD has broken below a key rising trendline on the 4-hour chart and continues to reject from former support at 1.1714. Indicators such as the Supertrend and EMA clusters remain aligned in favor of bears, with the 20/50/100 EMA zone near 1.1710–1.1675 acting as a firm ceiling. The 200 EMA at 1.1577 offers the next level of medium-term dynamic support.
EUR/USD price dynamics (Source: TradingView)
Momentum indicators point to further weakness unless new catalysts emerge. The DMI shows -DI above +DI with an ADX of just 12.59, indicating bearish dominance amid low trend strength. If the 1.1650 floor fails, the pair could extend losses toward 1.1600 or even 1.1550.
What’s next for the euro?
The euro’s immediate path will depend on how U.S.-EU trade negotiations evolve and whether upcoming ECB commentary reinforces or diverges from the current cautious tone. Key support lies at 1.1650, while a move above 1.1714 could shift sentiment. Until then, range-bound trading with a bearish bias remains likely.
Previously, we noted that EUR/USD price was trading near 1.1710 with weakening bullish momentum. The pair has since failed to reclaim key resistance, and the breakdown has now shifted the focus toward whether 1.1650 can hold amid rising macro pressure.
