- The EUR/USD price analysis shows a lower likelihood of a US-Eurozone trade deal.
- Trump said he would send a letter to the EU as soon as Friday.
- Tariffs will hurt demand for goods from the Eurozone.
The EUR/USD price analysis shows a lower likelihood of a trade deal between the US and the Eurozone. Trump said he might send a letter to the bloc notifying it of higher tariffs by Friday. Meanwhile, the US president announced higher tariffs on other countries, such as Canada. The move boosted the dollar against most of its peers.
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The US president got more aggressive on tariffs on Thursday. He announced that more countries will start paying higher tariffs on August 1. These include Canada, which has a 35% levy on its goods. Although the Eurozone survived again, it was clear that Trump’s tone had changed.
Initially, market participants were hopeful of a trade deal between the US and the European Union. Talks have gone on for some time. However, Trump said he would send a letter to the EU as soon as Friday, notifying it of higher tariffs. The move will likely plunge the euro. These tariffs will hurt demand for goods from the Eurozone and weigh on the economy.
At the same time, if the EU responds, it could ignite a trade war with the US, with lasting effects.
EUR/USD key events today
Market participants do not expect any key economic releases from the US or the Eurozone. Therefore, all focus will remain on tariff developments.
EUR/USD technical price analysis: Bears approach a solid support trendline
On the technical side, the EUR/USD price has pulled back from its highs near the 1.1800 key level. The pullback is starting to resemble a downtrend, as the price is respecting the 30-SMA as resistance and is forming lower highs and lows. However, to confirm a new downtrend, it must also break below its long-standing bullish trendline.
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The EUR/USD has maintained a bullish trend on a larger scale, respecting a clear support trendline. However, the price has also broken through the 30-SMA freely. A break below this trendline would be a significant milestone. It would indicate a shift in sentiment from bullish to bearish. It would also allow the price to retest lower support levels, such as 1.1600 and 1.1450. However, if the trendline holds firm, bulls will return to push the price above the SMA and retest the 1.1800 resistance.
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Saqib Iqbal
