EUR/USD jumps 0.5% as Trump softens NATO tariff stance

EUR/USD surged 0.5% to 1.0420 following President Trump's announcement of walking back threatened NATO tariffs, easing transatlantic trade tensions. The policy reversal triggered immediate dollar selling, with the DXY index dropping 0.4% from daily highs. European equities rallied on the news, supporting euro strength as geopolitical risks diminished. The pair broke above the 1.0400 psychological resistance, with technical momentum turning positive on the 4-hour chart. US 10-year yields fell 5 basis points to 4.52%, further weighing on dollar demand. Immediate resistance now sits at 1.0450 (21-day MA), while support has formed at 1.0380. The de-escalation removes a significant headwind for the euro, though ECB policy divergence with the Fed continues to cap upside potential. Traders await Friday's Eurozone GDP data for further directional cues on the single currency's trajectory.