The EURUSD has declined due to renewed tariff concerns affecting market sentiment. The President announced that tariffs on Mexico and Canada will continue as planned, with tariffs on China escalating from 10% to 20%, alongside concerns regarding potential European tariffs.

The EURUSD has approached a key support zone characterised by several important technical levels, including 1.04065, 1.0401, and 1.0405, which may prompt a temporary pause or reversal in trading activity.

Stock markets have also dipped, with the S&P index down by 15.99 points or 0.27%, and the NASDAQ index down by 150 points or 0.78%.

US yields remain elevated but stable, with the 10-year yield rising by 3.8 basis points to 4.286%, and the two-year yield increasing by three basis points to 4.100%.

This downturn in the euro’s value mirrors persistent caution in financial markets. With tariffs rising, concerns about more trade restrictions targeting Europe are mounting. The possibility of additional barriers has kept traders on edge, leading to lower appetite for risk.

The pair hovering at this support level suggests that traders are monitoring these prices carefully. Past activity around these figures implies they have been areas where momentum has shifted. If selling pressure continues, a break lower could push it towards fresh lows, potentially drawing in even more selling. If a bounce occurs, short-term upward moves could develop, but resistance zones overhead may limit advances.

Shares reflecting broader uncertainty reinforce this risk-off mood. With the S&P and NASDAQ both declining, investor sentiment remains weak. While these declines are not extreme, they indicate a reluctance to bid prices higher amid reduced confidence.

Bond markets tell a slightly different story. Yields remain elevated yet without major volatility. The 10-year yield ticking up by a few basis points suggests that expectations around monetary policy have not changed much. Shorter-dated bonds moving in a similar fashion support this, signalling that markets do not foresee abrupt shifts from central banking officials.

In the days ahead, movements will likely be dictated by responses to the latest trade developments. Traders will need to factor in shifting sentiment and how upcoming statements affect positioning. Watching how financial instruments respond to changes in tone from policymakers will be necessary to gauge possible moves.