EUR/USD holds gains amid US-EU trade uncertainty

• The Euro nudges lower but holds most of the gains after the last two days' rally.
• The US Dollar has lost momentum on growing concerns about Trump's tariffs.
• Fed Chairman Powell will speak on Tuesday amid pressures to resign from President Trump.

The EUR/USD pair is trading with minor losses on Tuesday, consolidating most of the gains taken during the previous two trading days. The pair consolidates recent gains with investors awaiting news about the trade negotiations between the European Union (EU) and United States (US).

The Euro (EUR) is currently trading at 1.1685, slightly lower on the daily chart but more than 1% above last week's low of 1.1555. The pair has also broken the top of a bearish channel from July 1 highs, which suggests that further appreciation is likely.

The pair drew support from a somewhat softer US Dollar (USD) and lower US Treasury yields on Monday to extend Friday's recovery, but has stalled below 1.1700 as investors' appetite for risks waned, with trade uncertainty weighing on sentiment as the August 1 tariff deadline approaches without significant progress in the negotiations.

EU and US representatives keep negotiating in an attempt to reach a deal, but hopes of a successful outcome diminish by the day. Recent comments from the European side reflect that confidence in a deal is waning and the bloc is exploring retaliatory measures. Some countries are considering wide-ranging anti-coercion measures targeting US services as a response to the hefty unilateral levies announced by US President Donald Trump.

In the economic calendar, during the European session, the European Central Bank (ECB) will release its Bank Lending Survey, providing some insight about the financial conditions in the Euro Area.

Later on the day, Federal Reserve's (Fed ) Chairman Jerome Powell's speech in Washington will grab some attention. The Fed chair is not expected to comment on monetary policy as the Fed is within its blackout period ahead of the interest-rate decision on July 30, but his reaction to the unprecedented pressures from the US administration might have some impact on the market.

Daily digest market movers: The US Dollar loses footing amid trade uncertainty

• The US Dollar seems to have lost the bullish momentum seen over the recent weeks. The Greenback is ticking up on Tuesday, but the last two days' reversal suggests that the market is starting to become anxious about the impact of tariffs as the August 1 deadline approaches.
• In the absence of key macroeconomic releases, the continuous attacks from the US administration on Fed Chair Jerome Powell keep attracting investors' attention, eroding the independence of the US central bank and the US Dollar's status as reserve currency.
• In the Eurozone, on Monday, an ECB survey on access to finances showed that European firms are positive about their growth outlook, yet wary about the potential impact of trade tensions. The Euro appreciated following the release of the survey.
• Investors will also be attentive to the quarterly earnings of tech megacaps Alphabet and Tesla, while in Europe, the results of SAP, the region's largest software maker, will provide some clues about the impact of a strong currency on European companies' revenue.

EUR/USD breaks above trendline resistance and looks at 1.1720

EUR/USD is showing mounting bullish momentum after breaking the top of a downtrend channel from July 1 highs. The pair is ticking lower on Tuesday, but technical indicators are pointing higher with the 4-hour Relative Strength Index and the MACD moving within bullish territory.

Immediate resistance lies at 1.1720, which capped bulls on Monday, ahead of the July 10 high at 1.1750 and the July 7 high at 1.1790.

On the downside, the pair may find support at the July 18 high at 1.1675, but a retest to the reverse trendline, now at 1.1655, should not be discarded. A bearish reaction below that level would cancel the bullish view and bring Monday's low, at 1.1620, to the focus.