EUR/USD Volatility Spikes on US Tariff Threats Against Europe

EUR/USD faces increased selling pressure as renewed US tariff threats against European exports weigh on the single currency. The pair has declined 0.4% in early trading, testing support at 1.0750 as traders price in potential trade war escalation. Market participants fear a 30% US tariff on EU goods could significantly impact European economic growth, particularly in manufacturing-heavy Germany. The threat has already pushed EUR/USD implied volatility to three-month highs, with options markets pricing in larger daily moves. Technical indicators show the pair breaking below its 50-day moving average at 1.0780, with next support at 1.0720. Resistance now sits at the broken 1.0780 level. Trade tensions typically favor safe-haven currencies like USD and JPY over risk-sensitive EUR. Traders should monitor any diplomatic developments or retaliatory measures from the EU, which could trigger sharp reversals in current positioning.