The Trump’s announcement of 25% tariffs on auto imports yesterday weighed on the euro as traders increased slightly their bets for more ECB easing this year on the expected hit on the European economy. The EU-US yield differentials have been moving more in favour of the US in the recent weeks as the spike following the German defence spending news eventually started to wane.

On the 1 hour chart, we can see that the upside in the EURUSD pair has been capped by a trendline. This looks like a textbook downtrend and the sellers will likely continue to lean on the trendline to keep pushing into new lows with a defined risk just above the trendline. The buyers, on the other hand, will want to see the price breaking higher to start targeting new highs.