EUR/USD under pressure amid strong US Dollar sentiment

The EUR/USD pair has dipped back into negative territory, trading at 1.1615 as the US dollar regains ground following yesterday’s losses.

Market sentiment was initially rattled by reports suggesting Federal Reserve Chair Jerome Powell could be dismissed. Although Donald Trump later described these rumours as “unlikely”, the speculation reignited concerns over the central bank’s independence.

On the macroeconomic front, weaker-than-expected US producer inflation data added to the case for potential Fed rate cuts later this year. June’s price index remained flat, contrary to forecasts of a modest rise.

Traders now await retail sales figures, which could provide further insight into the strength of US domestic demand.

Meanwhile, trade tensions persist as Trump reaffirmed plans to maintain 25% tariffs on Japanese imports while hinting at a potential new trade deal with India. Earlier in the week, he also signalled progress in negotiations with Indonesia. These developments suggest the White House is balancing its hardline trade stance with efforts to engage Asian partners.

Technical analysis: EUR/USD

Four-hour chart

On the H4 chart, the EUR/USD pair has formed a consolidation range following the breakdown from the growth channel at 1.1675 and has subsequently completed a downward move towards the local target of 1.1562. A correction back to the 1.1720 level has also taken place. At present, a new wave of decline is developing towards 1.1520. Technically, this scenario is confirmed by the MACD indicator, as its signal line is below zero and pointing firmly downward.

One-hour chart

On the H1 chart, the EUR/USD pair has executed a downward impulse to 1.1610, followed by a correction to 1.1658. Today, a tight consolidation range is expected to form around 1.1620. If the pair breaks lower from this range, a move towards 1.1585 becomes likely, with the potential for further downside continuation to 1.1520. Technically, this scenario is confirmed by the Stochastic oscillator: its signal line lies below 50 and is heading sharply lower towards 20.

Conclusion

The EUR/USD remains under pressure amid dollar strength, with technical indicators supporting further downside potential. Market focus now shifts to upcoming US retail sales data and evolving trade dynamics.