EUR/USD Current price: 1.1685
- US President Donald Trump threatened Mexico, the European Union with fresh tariffs.
- The macroeconomic calendar is scarce, with first-tier data releases scheduled for Tuesday.
- EUR/USD lower lows hint at a downward extension towards the 1.1600 region.
The EUR/USD pair is under mild pressure below the 1.1700 mark on Monday, as risk aversion took over financial markets. Weekend news spurred concerns, as United States (US) President Donald Trump threatened fresh tariffs on Mexico and the European Union. Starting August 1, both economies will face a 30% levy on all imports.
Trump sent letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum that were posted on his Truth Social media site on Saturday.
Maroš Šefčovič, EU’s trade commissioner, noted tariff of “30%, or anything above 30%… has more or less the same effect. So, practically it prohibits the trade,” adding it will “be almost impossible” for the bloc to continue its current level of trade with America.
Other than that, the macroeconomic calendar for both economies is quite scarce, with the focus on the US June Consumer Price Index (CPI) release on Tuesday.
EUR/USD short-term technical outlook
The daily for the EUR/USD pair shows it met buyers around a mildly bullish 20 Simple Moving Average (SMA), currently at around 1.1660. The longer moving averages, in the meantime, maintain their neutral-to-bullish slopes well below the shorter one. Finally, technical indicators aim south within positive levels, reflecting the ongoing retracement from the yearly peak at 1.1830.
The 4-hour chart shows that a mildly bearish 20 SMA is converging with a bullish 100 SMA at around 1.1700, providing intraday resistance. Technical indicators head nowhere within negative levels, in line with the increased downward risk. The pair bottomed for the day at 1.1650, the immediate support level.
Support levels: 1.1650 1.1620 1.1590
Resistance levels: 1.1700 1.1730 1.1770
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