Insights 
VT 
Key Highlights
- EUR/USD touches 1.1659—lowest in three weeks
- Trump targets EU and Mexico with 30% tariffs starting August 1
- Traders await U.S. CPI and Fed policy cues
The euro slipped to a three-week low against the dollar early Monday, sliding to 1.1659, after U.S. President Donald Trump reignited global trade tensions with the announcement of sweeping new tariffs. Trump proposed a 30% tariff on imports from both the European Union and Mexico, adding to a week of aggressive trade actions targeting long-standing allies and economic partners.
The move, set to take effect on August 1, sent a mild ripple through currency markets—though the initial reaction was relatively muted. Still, for EUR/USD, which has already been treading water in a narrow range for weeks, this renewed uncertainty proved enough to nudge the pair lower.
Both the EU and Mexico called the new tariffs “unjustified” and “disruptive,” but refrained from any immediate countermeasures. The European Commission confirmed it would extend its current tariff suspension until early August, signalling an attempt to de-escalate the situation.
U.S. CPI, Fed Outlook Could Decide EUR/USD Trajectory
Attention now shifts to Tuesday’s U.S. Consumer Price Index (CPI) release. Markets anticipate a marginal pickup in core inflation, which could influence expectations for Federal Reserve policy in the months ahead.
At present, Fed funds futures price in roughly 50 basis points of easing by December, though Fed Chair Jerome Powell has pushed back on political pressure for rate cuts. On Sunday, Trump doubled down—suggesting Powell should step down, once again casting a shadow over the central bank’s independence.
If Tuesday’s inflation print surprises to the upside, EUR/USD could break down below the 1.1659 level, as higher U.S. yields support the dollar. Conversely, a softer reading may provide the euro some breathing room, especially if risk appetite returns
Technical Analysis
EUR/USD is currently trading around 1.1665 after dipping below the critical 1.1670 support—the lowest level seen in three weeks—driven by renewed U.S. tariff tensions. After rejecting a move above 1.1700, price reversal comes as the 5‑, 10‑, and 30‑period moving averages have flattened and turned slightly lower, indicating diminished bullish momentum. The MACD shows fading green momentum bars and a subtle bearish bias, pointing to increased downside pressure.
Picture: EUR/USD tests 1.1650 support amid tariff uncertainty, as seen on the VT Markets app
Key levels remain intact: resistance near 1.1700–1.1740, reinforced by the 50‑SMA and recent high. Immediate support sits at 1.1650, followed by deeper zones at 1.1600 and 1.1560 (200‑SMA). A break and hold below 1.1650 could invite sellers toward 1.1600, whereas reclaiming 1.1700 with conviction would pave the way for a retest of 1.1740‑1.1750.
EURUSD at a Crossroads
In the coming days, key drivers include U.S. CPI (July 15), tariff news, and any ECB statements. Weak U.S. CPI or easing trade rhetoric could prompt a rebound. Conversely, a strong dollar from risk-off sentiment or higher U.S. inflation may extend the euro’s pullback.
