EUR/USD Price Forecast: Weakness Likely Below 20-Day EMA Amid US-EU Trade Tensions
The EUR/USD pair stayed close to 1.1670 during Monday’s Asian trading session. This came after the U.S. announced a 30% tariff on goods from the European Union and Mexico, starting August
1. These new trade tensions have increased pressure on the euro. EU President Ursula von der Leyen mentioned that talks with the U.S. are still ongoing to prevent the tariffs, but if needed, the EU may respond with its own measures.
Traders are also keeping a close eye on the U.S. CPI inflation data for June, which will be released on Tuesday. If inflation comes in stronger than expected, it could influence the Federal Reserve’s interest rate decisions.
From a technical analysis point of view, EUR/USD is now close to its 20-day Exponential Moving Average (EMA) at 1.1660 and a rising trendline that started from February’s low. The RSI (Relative Strength Index) has dropped to a neutral range, showing that upward momentum is slowing down. However, the broader trend still points upward.
If the price drops below the June 24 low of 1.1573, it could fall further toward 1.1454 or even 1.1400. On the other hand, if EUR/USD breaks above the July 1 high of 1.1830, it may move towards 1.1900 and possibly 1.2000.
Impact:
Due to rising US-EU trade tensions and the upcoming CPI release, EUR/USD could possibly stay weak in the short term. However, any cooling in inflation or progress in trade talks might support the euro.