EUR/USD Plunges to 5-Week Low on US-EU Trade Deal Impact
EUR/USD has declined sharply to five-week lows near 1.0780, dropping 0.8% (90 pips) as markets digest the implications of a new US-EU trade agreement. The deal, which reportedly favors US exports, has strengthened dollar demand while pressuring the euro across the board. Technical indicators show EUR/USD breaking below key support at 1.0820, with momentum indicators pointing to further downside potential. The pair faces immediate support at 1.0750 (June low), while resistance now sits at 1.0820 (former support turned resistance). Market positioning data reveals traders are increasingly bearish on the euro, with speculative shorts rising to multi-month highs. The trade deal's terms could continue weighing on EUR/USD sentiment, especially if European growth concerns intensify. Traders should monitor upcoming ECB communications for potential policy responses to the trade dynamics.
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