EUR/USD extends its rise while the dollar suffers from the US credit reduction.

• EUR/USD extends its rise about 1,1250 while the US dollar continues to face pressure due to the reduction of the US sovereign credit rating.
• Washington highlights the chips of IA manufactured by Huawei as a threat to US export controls.
• The EU executive arm foresees an average inflation of 1.7% in 2026.

EUR/USD He earns more land about 1,1250 in the European session on Tuesday, after the upward movement of the previous day. The main currency pair remains in a favorable position while the reduction of the sovereign credit rating of the United States (USA) by Moody’s continues to hit the US dollar (USD), with The dollar index (Dxy) extending its fall to about 100.00.

On Friday, Moody’s reduced the US credit rating on a step to AA1 from AAA. This movement focused the attention of the participants of the financial market in the growing government debt of the US of 36 billion dollars and fiscal imbalances, which would lead to a long -term increase in the cost of capital for US administration.

Investors are concerned that US debt problems are expected to expand even more, with the “great and beautiful bill” of President Donald Trump probably adding between 3 billion and 5 billion dollars to the already gigantic debt load.

This has renewed concerns about the credibility of the US dollar, which has already been beaten by “constant change” on Washington’s tariff policy.

Meanwhile, the new concerns about the de -escalation in the commercial war between the US and China have also weighed over the dollar. Earlier in the day, China accused the US of discouraging the use of artificial intelligence (AI) chips manufactured by Huawei and Chinese AI models, highlighting them as a threat to US export control..

According to a spokesman for the Ministry of Commerce of China, the US Department of Commerce Department is “discriminatory” and “market distorting”, which led Beijing to “demand” that the administration “corrects its errors.” Beijing warned that Washington’s comments point to chips manufactured in China as a threat undermine the commercial agreement, which took place in Geneva last weekend.

What moves the market today: the EUR/USD wins while the EU executive arm sees inflation below 2% in 2026

• The additional increase in the EUR/USD is also driven by a certain strength of the euro (EUR). The main currency pair continues to attract offers despite the fact that the executive arm of the European Union (EU) has warned about the risks of inflation being maintained below the 2% target of the European Central Bank (ECB).
• The spring forecast report published by the EU executive arm on Monday showed that consumption inflation will return to the objective of 2% in the middle of the year, averaging around 1.7% in 2026. According to the report, the lower energy costs, the diversion of Chinese goods and a stronger euro will be responsible for the downward risks for inflation.
• A series of ECB officials have also warned about the risks of inflation being diverted and argued in favor of more interest rates cuts. The Governing Council member of the ECB, Isabel Schnabel, who has generally been a hawk, has also expressed confidence that “disinflation is on their way” in her comments during European negotiation hours. However, Schnabel still believes that US tariffs will raise “upward risks for medium term inflation”.
• This week, investors will focus on the preliminary data of the Purchase Management Index (PMI) HCOB for May, which will be published on Thursday. According to estimates, the general business activity is expected to have grown at a faster rate than in April. In the US economy, it is estimated that the preliminary compound PMI of Global S&P has grown constantly.

Technical Analysis: The EUR/USD maintains the 20 -day key EMA

EUR/USD moves up at 1,1250 on Tuesday. The short -term perspective of the torque is bullish since it maintains the exponential (EMA) mobile average of 20 days, which is around 1,1214.

The relative force index (RSI) of 14 periods oscillates within the range of 40.00-60.00, suggesting indecision among the operators.

Looking up, the maximum of April 28, 1,1425 will be the main resistance for the pair. On the contrary, the psychological level of 1.1000 will be a key support for The euro bulls.