EUR/USD Vulnerable to Further Declines Below 1.1700 as Dollar Strength Persists
Tariffs, Fed Caution, and Fading Technical Momentum Pressure the Euro
The EUR/USD currency pair has slipped below the 1.1700 support level, edging down into the 1.1680–1.1690 range as the U.S. dollar (USD) regains strength amid renewed global trade tensions and cautious commentary from the Federal Reserve. With investors awaiting clarity from the Fed meeting minutes and a heavy U.S. Treasury auction this week, EUR/USD remains capped just above a critical psychological threshold.
Concerns over new tariff threats from the U.S. — including proposals affecting imports of copper, semiconductors, and pharmaceuticals — are weighing on broader sentiment. This has contributed to flows into the safe-haven dollar, while simultaneously undermining euro strength. The European Central Bank (ECB) is closely watching the currency’s trajectory, as a stronger euro could hurt export competitiveness and complicate the inflation outlook in the Eurozone.
Technically, EUR/USD is flashing signs of weakness. After touching a short-term high near 1.1830 last week, the pair has reversed course, breaking below key support at 1.1700 and retesting it amid choppy consolidation. Chart watchers highlight a narrowing triangle pattern forming, with downside targets emerging near 1.1645 and 1.1611 if the 1.1680 zone fails to hold. Upside resistance remains at 1.1760–1.1800.
Several major financial institutions have weighed in on the pair’s near-term trajectory. ING expects EUR/USD to remain range-bound between 1.1700 and 1.1830 over the next few sessions, reflecting cautious consolidation rather than a trend breakout. Scotiabank echoes this sentiment, warning that a close below 1.1680 would likely lead to a test of the 1.1640 handle.
Meanwhile, all eyes are on the upcoming U.S. 10-year bond auction and the Fed minutes, both expected to offer clues on the path forward for U.S. interest rates. Any hint of dovish commentary or easing inflation expectations could boost risk sentiment — though stronger-than-expected CPI data or hawkish undertones from the Fed could reignite USD strength and drive EUR/USD lower.
With market participants on edge and technical levels tightening, traders may prefer to wait for a breakout signal. The next big move could come on the back of the U.S. inflation report or further tariff developments — both of which are set to dominate headlines in the coming days. Until then, expect EUR/USD to grind within a tight range with a downside bias.
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