Eurozone officials are bracing for Trump’s tariff focus to turn to the EU shortly, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR is trading off lows

“Hefty tariffs would prove significantly costly for the EU in growth terms. Officials are hoping a negotiated settlement can be reached but are prepared to retaliate. The EUR is underperforming slightly on the day, reflecting concerns that after Mexico, Canada and China, Europe will be next on the tariff hit list.”

“Spot set a new cycle low near 1.0140 yesterday before rising strongly and closing net higher on the day. A major bull ‘hammer’ signal on the chart would ordinarily point to a deep reversal in recent weakness but scope for EUR gains is likely limited for now. Support is 1.0250/55. Resistance is 1.0450.”