EUR/USD: Consolidation on the daily chart - OCBC

Euro (EUR) consolidated overnight after 4 days of rally. Pause comes as markets re-evaluate prospects of trade deals. EU believe a trade deal with US is within reach ahead of 1 August deadline. Pair was last seen at 1.1740 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

EUR's run-up stalls under 1.18

"There were media reports of a broad 15% tariff on most European imports though officials from both sides refused to speculate on latest talks. Trump earlier said that that his condition for withdrawing the threatened 30% levy on EU imports was 'if they agree to open up the European Union to American businesses'. Meanwhile, US Treasury Secretary Scott Bessent suggested good progress with the EU was being made. EU-China summit yielded little outcome, as widely anticipated."

"European Commission President Ursula called for the bloc's trade relationship with China to become more balanced as tensions brew between the two parties. She also emphasized on fair competition. Ursula also flagged a few issues, including market access and export controls on rare earths and permanent magnets, and China's overcapacity. Nevertheless, she described the talks as 'very constructive and pragmatic'. ECB delivered a policy hold, as widely expected. Lagarde said that the ECB is well positioned to wait-and-see, with inflation at the 2% goal and the economy performing in line with or better than expectations. Schnabel said the euro zone's 20-nation economy is resilient and deems the bar for another rate cut 'very high'."

"EUR's run-up stalled under 1.18. Daily momentum is not showing a clear bias. 2-way trades likely. Resistance at 1.1780, 1.1840 levels. These levels need to be taken out for bulls to reassert. Support at 1.1715 (21 DMA), 1.1630 and 1.1560 levels (50 DMA)."