• EUR/USD finds pressure near 1.0740 as the US Dollar strengths ahead of US Retail Sales data for May.
• The US Retail Sales are expected to have grown by 0.2% after remaining flat in April.
• ECB policymakers remain concerned as the inflation outlook appears to be stubborn.

EUR/USD struggles to extend recovery above 1.0740 in Tuesday’s European session. The major currency pair faces pressure as the Euro remains on the backfoot due to political turmoil in France and strength in the US Dollar (USD) ahead of the United States (US) Retail Sales data for May.

The Euro has been under pressure since French President Emmanuel Macron called for a snap election after the Centralist alliance suffered a defeat from Marine Le Pen's National Rally (RN) in the European Parliament elections. Investors worry that the formation of the RN government would trigger a financial crisis in the European Union’s (EU) second-largest economy. The RN has promised a lower retirement age, energy price cuts, more public spending, and "France first" economic policies in its manifesto.

On the monetary policy front, European Central Bank (ECB) policymakers continue to emphasize keeping interest rates steady in the near term, as an aggressive policy-easing approach could revamp price pressures again. The ECB reduced its Deposit Facility Rate by 25 basis points (bps) for the first time since 2019 in the Jue meeting as price pressures were stubbornly higher due to the Covid pandemic and the Russia-Ukraine war.