EUR/USD threads water below 1.1650

• US political and fiscal woes led the FX board in the absence of relevant macroeconomic data.
• US President Donald Trump threatened fresh levies on countries that apply digital taxes.
• EUR/USD trades at the lower end of its weekly range with increased downward momentum.

The EUR/USD pair trades within a limited range on Tuesday, holding above the 1.1600 mark but unable to extend gains beyond an intraday peak in the 1.1660 region. The pair is hovering around 1.630 in the American afternoon, lacking a clear bias.

Market participants battle to maintain a positive view in the American session on Tuesday, as recent headlines coming from the White House triggered fresh concerns. United States President Donald Trump threatened to impose new tariffs on countries that apply digital taxes on US tech companies. In a post in Truth Social, Trump stated: "I put all Countries with Digital Taxes, Legislation, Rules, or Regulations on notice that unless these discriminatory actions are removed, I, as President of the United States, will impose substantial additional Tariffs on that Country's Exports to the U.S.A."

Additionally, the US President decided to fire Federal Reserve (Fed) Governor Lisa Cook amid allegations of irregularities in mortgage applications. Cook did not leave and claimed Trump does not have the authority to remove her. The case will likely end in a court, but in the meantime, the Fed's independence is once again in doubt.

Given that the macroeconomic calendar has been quite scarce this week, speculative interest takes clues from political and fiscal headlines. The only relevant figure scheduled for this week is the US Personal Consumption Expenditures (PCE) Price Index, scheduled for release on Friday, the Fed's favorite inflation gauge.

Technical outlook

The daily chart for the EUR/USD pair shows it remains just above a flat 20 Simple Moving Average (SMA), which reflects the absence of directional interest. Technical indicators, in the meantime, hover around their midlines, also lacking directional strength. The weekly bottom at 1.1602 is the immediate support level ahead of Friday's low at 1.1583. A break below the latter could encourage selling. Conversely, resistance comes at the 1.1700 threshold, en route to the 1.1741 top from last week.