Euro price dips to $1.165 as tariffs and technical pressures weigh on EUR/USD outlook
Euro hits 1.165 as U.S. tariff move and trendline rejection cap EUR/USD recovery
The euro weakened to its lowest level in over two weeks on Monday, sliding to 1.165 against the dollar after U.S. President Donald Trump announced a 30% tariff on imports from the European Union and Mexico, effective August 1.
Highlights
- Euro slides to 1.165, a two-week low, after U.S. announces 30% tariff on EU and Mexico imports
- EUR/USD technical structure remains bearish below 1.175, with key support at 1.165 in focus
- ECB expected to hold rates steady, but macro risks and trade tension cloud euro’s outlook
The move intensified global trade tensions and triggered a risk-off reaction in currency markets. While EU officials pledged to continue negotiations, the European Commission delayed retaliatory measures, adding uncertainty to the euro’s near-term trajectory.
EUR/USD price dynamics (Source: TradingView)
Despite the pullback, the euro remains nearly 13% higher against the dollar year-to-date, buoyed by expectations of steady interest rates from the European Central Bank and stronger fiscal policy out of Germany. However, traders are now cautious as the ECB may still consider one additional rate cut later this year, depending on economic conditions. The latest macro developments, including shifting U.S. trade policy and a cooling eurozone outlook, are complicating the single currency’s bullish narrative.
Technical setup signals downside risks near key support
The EUR/USD pair is now trading just above the 1.165 mark, testing a critical horizontal support zone. On the 4-hour chart, the pair remains in a bearish structure beneath a descending trendline, with price failing to hold above the 1.175 resistance region. Bollinger Bands are tightening, suggesting a potential breakout ahead. Price is currently under the 20, 50, and 100 EMAs, reinforcing the short-term bearish trend.
The Supertrend indicator continues to flash a sell signal, with dynamic resistance marked near 1.175. A clean break above that level could open a path toward 1.180, but failure to reclaim that zone may lead to further losses toward 1.158 and possibly 1.150. On the daily chart, the broader uptrend remains intact, but bulls must defend the 1.165–1.160 cluster to avoid deeper correction.
Key levels and forward outlook
Traders should closely monitor the 1.173 to 1.175 resistance zone for signs of bullish recovery. A daily close above would confirm short-term reversal potential. Meanwhile, continued pressure below 1.165 could activate the broader downside leg toward 1.150. Overall, macro risks and technical exhaustion are keeping EUR/USD under pressure for now.
In our earlier coverage, we highlighted the 1.175–1.180 zone as a key inflection point. The pair’s inability to hold this range has now resulted in the expected drift toward 1.165. This area now acts as make-or-break support in the coming sessions
