EUR/USD Outlook: Bulls Hold Ground Above 1.1750 Amid Trade War Fears

EUR/USD slipped slightly to around 1.1765 in early European trading on Monday, as rising concerns over global trade tensions and renewed tariff threats pressured the Euro. Market sentiment remains cautious following comments from US Treasury Secretary Scott Bessent, who confirmed that President Trump plans to send letters to several trade partners warning that tariffs may revert to April 2 levels by August 1.

EUR/USD Technical Analysis

Current Price: 1.1764
EUR/USD continues to trade without a clear direction, caught between the 20-period and 50-period Simple Moving Averages (SMA) on the 4-hour chart. The Relative Strength Index (RSI) is treading sideways just above the neutral 50 mark, indicating a lack of momentum.

• Immediate support: 1.1760 – midpoint of the ascending channel
• Key support levels: 1.1725 (50-period SMA), 1.1650 (channel support)
• Resistance levels: 1.1800 (psychological level), 1.1860 (channel resistance)

A sustained move above 1.1800 could encourage bullish continuation, while a break below 1.1725 would expose EUR/USD to deeper losses toward 1.1650.

Fundamental Overview

The Euro is under pressure despite a flat reading in Eurozone industrial production and a series of soft economic prints. Investors remain focused on escalating US-EU trade tensions. European Commission President Ursula von der Leyen stated that while the EU remains open to a trade deal, contingency plans are in place if talks fail.

Meanwhile, the US Dollar found fresh support after Friday’s strong jobs report. Nonfarm Payrolls rose by 147,000 in June, beating expectations of 110,000, while the Unemployment Rate dropped to 4.1%. ISM Services PMI also rebounded to 50.8, reflecting resilience in the US services sector.

According to the CME FedWatch Tool, the probability of a rate cut at the July FOMC meeting dropped below 5%, down from nearly 25% before the NFP data. The firm labor market has given the Fed breathing room, pushing back expectations of near-term easing.

Outlook

As long as EUR/USD holds above 1.1750, the broader bullish trend remains intact. However, any signs of escalation in US-EU trade tensions or further strength in US data could limit Euro upside in the near term. Traders will watch upcoming speeches from ECB officials and developments around US tariff policy closely.

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