The EUR/USD pair edged lower on Tuesday, dipping to 1.1556 amid subdued trading activity. Market participants are cautiously assessing the latest trade signals and recalibrating their expectations for monetary policy.
Trade tensions resurfaced as US President Donald Trump threatened India with steep tariff hikes over its continued purchases of Russian oil. Meanwhile, the European Union postponed retaliatory tariffs against the US by six months, with both sides pledging further negotiations.
The US dollar faced downward pressure last week following the release of a disappointing US employment report. July’s figures fell short of forecasts, reinforcing market bets on a Fed rate cut in September. Investors are now pricing in over 60 basis points’ worth of easing by year-end.
Political uncertainty also weighed on sentiment. The resignation of a Federal Reserve Board member and the dismissal of a key statistical agency head under Trump’s administration have fuelled concerns over stability in the US economic leadership.
Market focus now shifts to June’s foreign trade data and the latest ISM PMI report, which could offer fresh insights into the health of the US economy.
Technical analysis: EUR/USD
Four-hour chart

The EUR/USD corrected to 1.1590 before entering consolidation below this level. A breakout towards 1.1615 remains possible, but the primary expectation is a resumption of the downtrend, targeting 1.1348 as the next key support. This bearish view is supported by the MACD indicator, with its signal line firmly below zero and pointing downward.
One-hour chart

The pair has formed a consolidation range around 1.1555, with the minimum correction target already met. A downside breakout is anticipated, initiating the fifth wave of decline towards 1.1348. The Stochastic oscillator reinforces this outlook, with its signal line below 50 and trending sharply downward towards 20.
Conclusion
The EUR/USD remains vulnerable to further losses, driven by a combination of weakening technical structure and external macroeconomic pressures. Traders should monitor US economic data for signals on near-term direction, as the broader downtrend remains intact.