- The EUR/USD price analysis reveals growing uncertainty about the outlook for tariffs on Eurozone goods.
- Data in the previous session revealed unexpected strength in the US labor market.
- Market participants are watching the July 9 tariff deadline.
The EUR/USD price analysis reveals growing uncertainty about the outlook for tariffs on Eurozone goods as the deadline approaches. Progress in talks between the US and the Eurozone has been slow, yielding no deal. Meanwhile, the dollar strengthened after data revealed resilience in the labor market.
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The Eurozone is under pressure to get a trade deal before the July 9 deadline. If not, the US will impose high tariffs on Eurozone goods that could hurt the economy. Such an outcome would be bearish for the euro. Therefore, market participants might remain cautious about taking big positions in the euro.
Meanwhile, the dollar held firm after data in the previous session revealed unexpected strength in the labor market. The sector added 147,000 jobs in June, beating forecasts of 111,000. At the same time, the unemployment rate was 4.1%, which was below the estimated 4.3%. The positive report eased pressure on the Fed to lower borrowing costs.
However, tariff uncertainty has hurt sentiment as the market watches the July 9 deadline. Higher tariffs might escalate trade tensions, further hurting the dollar.
EUR/USD key events today
Market participants do not expect any key economic releases today. A holiday in the US will likely keep trading thin.
EUR/USD technical price analysis: Bulls and bears battle for control at the 30-SMA
On the technical side, the EUR/USD price is rebounding after a sharp decline that punctured the 30-SMA support line. The move came after the RSI made a bearish divergence, indicating fading bullish momentum. Bulls weakened when the price reached the 1.1800 resistance level.
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As a result, bears made a big-bodied candle that punctured the 30-SMA. However, it was not enough to keep the price below. Bulls are still struggling to push the price back up to retest the 1.1800 resistance level. If it holds firm again, the price will likely drop back below the SMA. Such a move would allow EUR/USD to target the 1.1600 support level.
On the other hand, if the price breaks above the 1.1800 resistance, it will form a higher high, confirming a continuation of the bullish trend.
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Saqib Iqbal
