EUR/USD upside attempts remain limited as trade uncertainty grips markets

• The Euro ticks up from lows but maintains its broader bearish trend intact.
• Hopes of progress on the Eurozone-US trade talks are providing some support to the Euro.
• EUR/USD is moving within an expanding wedge, a potentially bearish formation.

The EUR/USD pair is pulling back from intra-day highs and keeps its broader bearish trend from last week's highs intact. Investors remain wary of taking excessive risk after US President Donald Trump started sending tariff letters to batches of countries, bringing concerns about the global trade outlook back to the forefront.

The Euro (EUR) bounced up from nearly two-week lows at 1.1690 during Tuesday's Asian session, and advanced to intra-day highs at 1.1770, before returning to the 1.1740 area at the time of writing.

The Eurozone was not among the recipients of Trump's tariff letters and is not expected to receive one for the time being. Trade talks with the US are apparently showing progress and, according to market sources, a deal might be announced as soon as Wednesday.

This news has contributed to easing some pressure on the Euro, although upside attempts are likely to remain limited with concerns about global trade weighing on risk appetite. The economic calendar is light this Tuesday, and market concerns about a significant disruption of international trade are likely to support the safe-haven US Dollar to the detriment of riskier currencies, such as the Euro.

On the macroeconomic front, international trade figures from France and Germany have shown mixed figures, but the lower imports and exports point to a softer domestic demand and a weakening economic activity.