Original article by FXStreet.
Title: EUR/USD Remains Subdued Below 1.1700 as Market Awaits Directional Catalyst from US-EU Trade Developments
The EUR/USD currency pair showed limited activity in Monday’s early trading hours, remaining subdued below the 1.1700 level. Investors appeared cautious as they awaited clear signals surrounding the outcome of anticipated US-European Union trade discussions. With global markets tracking the escalation and de-escalation potential of future trade tensions, the pair hovered within a narrow range amid the lack of high-impact data releases.
Key Highlights:
– The EUR/USD pair remained in a consolidative phase early Monday, stuck below the 1.1700 level.
– Markets await updates on US-EU trade talks with traders unwilling to commit before any concrete developments.
– Economic data was relatively scant at the start of the week, limiting directional momentum.
– A moderate US Dollar demand provided mild downward pressure on the pair.
– Investors continue to assess risks related to protectionism, upcoming economic events, and Federal Reserve signals.
Market Overview
In Monday’s early Asian and European sessions, the euro struggled to gain momentum against the US dollar. Lackluster macroeconomic data and a general risk-averse tone in global markets contributed to the subdued movement in the EUR/USD pair, which continued consolidating around the 1.1680–1.1700 region without showing signs of a breakout.
The cautious mood across trading desks reflected investor uncertainty. The global outlook weighed heavily on major currency pairs, including EUR/USD, as the forex market continued to respond primarily to political, rather than purely economic, developments.
US-EU Trade Relations in Focus
Anticipation is building around the scheduled discussions between US and European Union officials. While details remain scarce, market participants hope for clarity on trade policies, potential tariffs, and efforts to de-escalate tension between the two economic blocs.
The euro has been particularly sensitive to trade-related developments over previous months. Signs of cooperation between Washington and Brussels are likely to support the euro, as it would signal reduced risk to the continent’s export-driven economy. Conversely, any comments or decisions indicating protectionist policies, higher tariffs, or trade retaliation will likely put the single currency under renewed pressure.
USD Uptick Limits EUR/USD Recovery
The greenback maintained a slightly bullish tone at the start of the week, gaining modestly in light of continued safe-haven demand. While major US economic indicators were absent on the released docket, the US Dollar Index (DXY) hovered near multi-session highs thanks to a cautious investor mindset driven by political risk and potential trade disputes.
Several factors favored the dollar, including:
– Ongoing concerns over global growth and trade stability.
– Expectations that the Federal Reserve would remain on a gradual tightening path, despite criticisms from the White House.
– Demand for safe-haven assets amid geopolitical tensions, which benefited the dollar from a relative strength perspective.
EUR/USD Technical Landscape
From a technical standpoint, the EUR/USD pair continued to respect the structure of a well-established range between 1.1640 on the downside and 1.1750 on the upside. A break beyond either level would likely dictate near-term direction.
Summary of Key Technical Indicators:
– RSI (Relative Strength Index) remained neutral, hovering just below the 50-level, indicating a lack of clear momentum.
– The 100-hour simple moving average (SMA) capped upside attempts around the 1.1700 region.
– Support is found near last week’s low of 1.1640.
– A breach below that could open the door to testing the July low at 1.1575.
Without major data releases slated from either side of the Atlantic in the immediate term, traders turned to technical setups and geopolitical narratives to provide temporary drivers. However, price action remained consolidative, with dips being bought and rallies being sold, reinforcing the ongoing lack of conviction across the board.
Upcoming Events to Watch
Though Monday’s economic calendar
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