EUR/USD price struggles near $1.167 as CPI and tariff concerns weigh on sentiment
Euro weakens near 1.1670 as CPI and tariff concerns limit upside momentum
The EUR/USD pair traded defensively near 1.1670 during Tuesday’s Asian session, failing to reclaim near-term resistance amid renewed global trade tensions and caution ahead of U.S. inflation data. The euro remains confined within a descending channel on the 4-hour chart, with bulls unable to clear the 20 and 50 EMAs near 1.1688 and 1.1702.
Highlights
- EUR/USD is trading near $1.1670 as traders await U.S. inflation data and tariff negotiations outcome
- U.S. CPI seen rising to 2.7% YoY, with core CPI forecasted at 3.0%, up from 2.8%
- Technical resistance at $1.1750 holds firm while EMAs near 1.1676 and 1.1590 offer downside targets
Monday’s rejection from the 1.1870 supply zone continues to cap upside attempts, and traders are now watching the 1.1676 and 1.1590 EMAs for potential downside continuation.
EUR/USD price dynamics (Source: TradingView)
A move above 1.1750 would be required to reverse the current bearish market structure, but recent price action suggests that rallies are losing steam near the channel’s upper boundary. For now, technical momentum indicators favor further softness unless macro data shifts sentiment.
U.S.-EU tariff tensions and CPI data in focus
Sentiment remains subdued following the announcement of 30% U.S. tariffs on EU imports, including automobiles, bourbon, and chemicals, set to take effect on August 1. While President Trump confirmed ongoing negotiations with Brussels, the European Commission has already prepared countermeasures, reportedly targeting $84 billion worth of U.S. goods.
With tariff headlines clouding near-term direction, investors are also awaiting U.S. CPI data for June, scheduled for release at 12:30 GMT. Consensus forecasts point to a 2.7% year-over-year increase in headline inflation, with core CPI expected at 3.0%, up from 2.8% previously. If data confirms rising price pressures, it may reduce market expectations for a Federal Reserve rate cut at the September meeting, potentially strengthening the dollar and further pressuring EUR/USD.
Technical levels remain in play
From a technical standpoint, downside targets include the 100 EMA at 1.1676 and the 200 EMA at 1.1590, while the channel ceiling near 1.1750 remains the barrier to watch. A breakdown below 1.1590 would likely accelerate selling, while a confirmed close above 1.1750 may neutralize the bearish setup and offer room toward 1.1800.
In earlier coverage, we highlighted the descending channel and the inability of EUR/USD to reclaim its 1.18 pivot. That structure remains intact, with Tuesday’s action reinforcing the bearish tone unless upcoming U.S. CPI data provides a catalyst for reversal.
