EUR/USD holds ground as EU spared from tariffs, Trump urges Fed cuts and delays deadline

• EUR/USD steadies near 1.1725 support as EU is spared from new US tariff measures for now.
• Trump urges Fed to cut rates, delays tariff deadline to August 1.
• Risk appetite fades as US mulls tariffs on tech and pharma sectors.

EUR/USD registers minimal gains during the North American session as the US dollar erases some of its earlier gains, following US President Donald Trump's demand that the Federal Reserve cut interest rates, as he delays the July 9 deadline towards August 1. At the time of writing, the pair trades at 1.1724, up 0.14%.

Risk appetite turned sour late in the day, amid uncertainty about trade policies. The US Commerce Secretary, Howard Lutnick, said that he expects another 15-20 letters to go out over the next few days, according to an interview with CNBC. In the meantime, Trump's threats to broaden tariffs to pharmaceuticals, semiconductors, and copper weighed on investors' mood.

Data-wise, the US economic docket revealed that small business confidence edged lower, according to a survey of the National Federation of Independent Business (NFIB).

The shared currency halted Monday's losses as the White House didn't target the European Union (EU) with additional tariffs. Recently, Trump acknowledged that talks between the US and Europe are progressing, adding that the EU has been "very nice" with the US.

Meanwhile, the US economic docket remains absent, with traders eyeing the release of June's Federal Open Market Committee (FOMC) minutes. In the EU, a flurry of officials from the European Central Bank (ECB) will cross the wires, led by Vice President Luis de Guindos, Chief Economist Philip Lane, and Joachim Nagel.

Daily digest market movers: Euro recovers as Trump said August 1 deadline is definitive

• The strength of the Greenback pressures the EUR/USD. The US Dollar Index (DXY), which tracks the buck's value against a basket of six currencies, finished Tuesday's session flat at 97.51.
• US President Donald Trump posted that Federal Reserve Chair Jerome Powell should cut rates now, after saying he should resign immediately earlier in the day. He pushes the July 9 deadline to August 1, although he said he would not extend it. Regarding the European Union (EU), he said the EU is treating the US very nicely, that's why he refrained from sending the tariffs letter.
• Trump added that he could have been harsher on trade and announced that he would impose duties on pharmaceuticals, semiconductors, and copper, which he said would result in tariffs of around 50%.
• The NFIB Small Business Optimism Index edged down to 98.6 in June, slightly below expectations of 98.7 and a decline from May's reading of 98.8. The decrease was primarily driven by an increase in the number of respondents citing excessive inventories.
• The EU stated that there has been some progress on a framework trade deal with the United States (US), according to EU spokesman Olof Gill. He indicated that Ursula Von der Leyen held a call with Trump on Sunday, saying that "They had a good exchange."

Euro technical outlook: EUR/USD clings to 1.1700 as the pair consolidates

From a technical perspective, the pair is neutral, with well-defined support and resistance levels. The Relative Strength Index (RSI), although bullish, has turned flat, indicating that neither buyers nor sellers are in control.

For a bullish continuation, the EUR/USD must clear the July 7 high of 1.1789 before buyers set their sights on 1.1800. Key resistance lies overhead with the year-to-date (YTD) high of 1.1829.

Conversely, if EUR/USD tumbles below 1.1700, this will expose the 20-day Simple Moving Average (SMA) as the first support level at 1.1649. A breach of the latter will expose the 1.1600 figure, followed by the 50-day SMA at 1.1448.