EUR/USD rises as investors remain cautious amid mounting risks

The EUR/USD pair climbed higher, settling near 1.1688 by Tuesday, as investors adopted a cautious stance ahead of key trade negotiation updates. The looming 1 August deadline –set by the US for new trade agreements – has kept markets on edge.

US Treasury Secretary Scott Bessent remarked on Monday that the quality of trade deals takes precedence over strict deadlines for the current administration. He added that President Donald Trump may extend the deadline for countries demonstrating constructive progress in negotiations.

Market attention has now shifted to an upcoming speech by Federal Reserve Chair Jerome Powell in Washington. Investors are keen for any signals regarding future interest rate policy.

Despite mounting pressure from Trump for a rate cut, markets remain sceptical that such a move will materialise in the next Fed meeting.

With a light economic calendar at the start of the week, traders are focusing on broader macroeconomic factors.

Technical analysis: EUR/USD

H4 Chart:

On the H4 chart, EUR/USD formed a consolidation range near 1.1640. Breaking upwards, the pair achieved its local correction target at 1.1716. Today, we anticipate a pullback towards 1.1640 (testing from above), followed by another upside move to 1.1726, where the correction’s potential is likely to be exhausted.

Subsequently, we expect a fresh decline towards 1.1560, with further downside potential to 1.1488. This scenario is supported by the MACD indicator, where the signal line remains above zero and is trending upwards.

H1 Chart:

On the H1 chart, the pair has met its local growth target at 1.1716, with the entire upward move seen as a correction to the prior downtrend. Today, a decline towards 1.1640 is probable, followed by another rise to 1.1726.

This outlook is confirmed by the Stochastic oscillator, where the signal line sits below 50 and is trending downward towards 20.

Conclusion

While EUR/USD shows short-term bullish momentum, the broader trend remains bearish, with key resistance levels likely to cap gains before another downward move unfolds.