Trade Tensions Dominate FX Markets: EUR/USD Under Pressure at 1.0750

Foreign exchange markets remain subdued as US-EU trade war concerns overshadow traditional fundamental drivers. The 30% US tariff announcement on European Union goods has pushed EUR/USD down 0.6% to test critical support at 1.0750. Market sentiment has shifted decisively risk-off, with safe-haven flows benefiting USD and JPY while pressuring European and commodity currencies. Implied volatility across major pairs has jumped to multi-month highs as traders hedge against further escalation. The trade dispute threatens to derail the eurozone's fragile economic recovery, adding downward pressure on EUR beyond immediate tariff impacts. Technical indicators suggest EUR/USD could extend losses toward 1.0700 if current support fails, while any bounce faces strong resistance at 1.0800. Traders are advised to maintain wider stops given elevated volatility and monitor headlines for any diplomatic breakthroughs that could trigger sharp reversals.