Technical Analysis:
EUR/USD struggled to preserve bullish momentum on Tuesday, initially benefiting from an early European rally that carried the pair as high as 1.0992. However, the pair saw these gains quickly dissipate amid renewed selling pressure driven primarily by widening German-U.S. 2-year yield spreads, which increasingly favor the dollar. After opening the New York session around 1.0930, EUR/USD dropped sharply to a session low at 1.0888, reflecting mounting bearish sentiment. Although late-session risk asset softness provided minor support, lifting the pair back toward the 5-day moving average around 1.0950, the overall daily gain of just +0.38% underscores ongoing vulnerability.

Technically, the formation of a daily inverted hammer candle after Tuesday's volatile trading session strongly suggests growing bearish pressures and weakening upside momentum. On the monthly timeframe, a similar inverted hammer formation has appeared, potentially signaling the start of a more significant correction following recent gains. The immediate technical level to monitor closely is the 1.0888 intraday low. A sustained break below this point could lead to increased bearish momentum, setting the stage for a retest of the critical 200-day moving average near 1.0730—an essential support level that must hold to preserve the broader bullish trend established since March 27 lows.

Conversely, meaningful upside recovery requires EUR/USD bulls to reclaim the 1.0968-1.0992 resistance zone decisively. However, this task is made difficult by the recent widening of yield spreads driven by resurgent U.S. Treasury yields. Upcoming economic releases, particularly U.S. March CPI and PPI, will be critical; upside surprises could intensify hawkish market expectations for the Fed, further widening yield differentials in favor of the dollar and increasing downside risks for EUR/USD. Until these uncertainties resolve, bullish traders should exercise caution, as the technical and fundamental landscape increasingly favors short-term bearish scenarios.