EUR/USD price slips below $1.165 as U.S. tariffs and Fed outlook pressure euro
EUR/USD trades below key trendline as U.S. tariffs and Fed inflation stance pressure euro
The euro fell below 1.1650 on Tuesday, breaking a key ascending trendline and signaling a shift in short-term momentum for EUR/USD. The pair is now trading near 1.1616, with price action decisively below the 20, 50, and 100 EMAs on the 4-hour chart.
Highlights
- EUR/USD breaks below 1.1650 trendline as dollar strength and tariffs weigh on sentiment
- Trump targets EU with 30% import tariff; ECB prepares €72B retaliation amid ongoing talks
- Traders await PPI, Beige Book, and Fed policy signals to gauge next directional move
The breakdown comes amid growing pressure from both technical and macroeconomic fronts, as investors brace for fresh U.S. inflation data and the ongoing fallout from new tariff threats by the Trump administration.
EUR/USD price analysis (Source: TradingView)
President Donald Trump has notified 25 countries, including the European Union, of a planned 30% tariff on imports, with smaller nations facing a separate 10% rate. The move has triggered concerns at the European Central Bank, with officials preparing a retaliatory package targeting €72 billion worth of U.S. goods. This includes high-impact sectors like aircraft and alcoholic beverages. Although EU officials have confirmed that trade talks are still underway, the risk of escalation remains high ahead of the tariff implementation deadline on August 1.
Technical weakness mounts amid macro pressures
EUR/USD has shifted into a lower-high structure, with repeated rejections from the 1.1680 zone and a descending trendline from the 1.1850 peak now capping upside attempts. A sustained failure to reclaim 1.1650–1.1680 could push the pair toward the 200 EMA near 1.1591, with a broader support cluster waiting between 1.1500–1.1440. Momentum indicators are also flattening, suggesting cautious sentiment ahead of Wednesday’s Producer Price Index (PPI) release, Fed Beige Book, and U.S. industrial production figures.
Markets are closely monitoring any signs of hawkish rhetoric from the Federal Reserve, especially after June’s 2.7% CPI and 2.9% core CPI readings kept inflation above the Fed’s target. If upcoming data reinforces the case for higher-for-longer rates, the U.S. dollar could continue to firm, weighing further on the euro.
In previous coverage, we highlighted EUR/USD’s vulnerability below the ascending trendline and the significance of the 1.1650–1.1680 zone. The current breakdown confirms that scenario, with the risk now tilting toward a deeper retracement unless bulls reclaim lost levels with strong momentum.
