EUR/USD steadies near highs amid broad Dollar weakness

EUR/USD holds gains near four-month highs at 1.1907.
Trump’s tariffs on South Korea and the US government shutdown concerns are likely to keep US Dollar rallies limited.
Bears should break below 1.1830 to confirm a downside reversal.

The Euro (EUR) remains practically flat on the daily chart on Tuesday, trading at 1.1880 at the time of writing, with downside attempts limited above 1.1850. US trade uncertainty, market expectations of further Federal Reserve (Fed) easing, and the growing chances of a US government shutdown are keeping the Greenback in the doldrums.

A new tariff salvo, this time to South Korea, highlights the erratic US trade policies, while in the US, the risk of a Government shutdown rises as tensions simmer in Minnesota after two people were killed in immigration raids. All this happens on the day the Fed starts its two-day meeting to decide its monetary policy amid unprecedented political pressures.

Against this backdrop, the US Dollar rallies are likely to be short-lived, with the Euro likely to remain relatively steady, not far from mid-term highs in the area of 1.1920. Market sentiment is positive on Tuesday, which is another positive factor for the Euro.

In the economic calendar, the US Consumer Confidence might provide some fundamental guidance later on the day, ahead of the speeches of European Central Bank (ECB) President Christine Lagarde and Bundesbank President Joachim Nagel.