EUR/USD faces pressure from ECB concerns over tariffs and FX strength

EUR/USD is experiencing downward pressure as European Central Bank officials express growing concerns about potential US tariffs and euro strength impacting the region's economic outlook. The ECB's previously comfortable position is being threatened by the combination of trade policy uncertainties and currency appreciation that could dampen export competitiveness. Market participants are closely monitoring developments as the stronger euro could complicate the ECB's inflation targeting efforts, potentially forcing a more dovish stance. The US dollar index has shown resilience, supported by expectations of continued economic outperformance and uncertainty around global trade relations. Technical indicators suggest EUR/USD faces immediate resistance at recent highs, while support levels are being tested as traders position for potential ECB policy adjustments. The currency pair's direction will likely depend on upcoming ECB communications and any concrete developments regarding US trade policy, with downside risks mounting if tariff threats materialize.