Yesterday, the U.S. stock market declined, while the U.S. dollar strengthened further following President Donald Trump's announcement that he plans to impose tariffs on pharmaceutical products and semiconductors in the near future.

"Most likely, we'll start with a low tariff at the end of the month and give pharmaceutical companies a year or so to adjust, then raise the tariffs very high," Trump told reporters on Tuesday upon returning to Washington after attending an AI summit in Pittsburgh. Trump also stated that the timeline for semiconductor tariffs would be "similar," and that imposing tariffs on chips would be "easier," without providing additional details.

At a cabinet meeting earlier this month, Trump said he intended to introduce a 50% tariff on copper in the coming weeks and anticipated raising tariffs on pharmaceuticals to as much as 200%, since companies had been given a year to bring manufacturing back to the U.S. Trump has already announced investigations under Section 232 of the 1962 Trade Expansion Act regarding pharmaceuticals, claiming that the influx of imported goods threatens national security.

However, analysts note that any tariffs could immediately affect drugmakers like Eli Lilly & Co., Merck & Co., and Pfizer Inc., which manufacture medications overseas—potentially leading to higher prices for American consumers. The same applies to Trump's proposed tariffs on semiconductors, which are expected to impact not only chipmakers but also popular consumer electronics like laptops and smartphones from Apple Inc. and Samsung Electronics Co.

Clearly, if tariffs are imposed, overseas manufacturing—which has helped reduce production costs—could become less viable, inevitably impacting pricing strategies and the affordability of medications for U.S. consumers. Whether companies will absorb some of the extra costs or pass them on to buyers remains to be seen. Recent U.S. inflation data suggests that American companies are already shifting some of their increased costs onto consumers. The question is to what extent this will continue.

A similar situation is unfolding in the semiconductor sector. Trump's tariff plans could affect not just chipmakers but also end-users who rely on electronics in daily life. Rising prices for laptops and smartphones from Apple and Samsung could negatively impact demand and the global competitiveness of U.S. companies.

Yesterday, Trump also announced an agreement with Indonesia to reduce a previously declared 32% tariff to 19%. As part of the deal, Indonesia agreed to purchase $15 billion worth of U.S. energy products, $4.5 billion in agricultural goods, and 50 Boeing Co. aircraft.

Trump further stated that he may finalize "two or three" trade agreements with other countries before implementing the so-called reciprocal tariffs scheduled to take effect on August 1, noting that a deal with India is among the most likely outcomes.

Earlier, the U.S. president also said that European Union officials—facing a potential 30% tariff—would meet with American negotiators this week.

EUR/USD Technical Outlook:At the moment, buyers need to think about reclaiming the 1.1625 level. Only then will it be possible to target a test of 1.1660. From there, a move toward 1.1690 becomes possible, although doing so without support from major players will be quite difficult. The final upward target would be the high at 1.1720. In the event of a decline, I expect serious buyer activity only around 1.1590. If there are no buyers there, it would be prudent to wait for a new low at 1.1550 or consider opening long positions from 1.1495.

GBP/USD Technical Outlook:Pound buyers need to reclaim the nearest resistance level at 1.3420. Only then will it be possible to aim for 1.3464, a level that will be difficult to break above. The furthest upward target would be the 1.3500 level. If the pair declines, bears will attempt to take control at 1.3375. If successful, a break of that range would deal a significant blow to the bulls and push GBP/USD toward the 1.3335 low, with a possible extension to 1.3290.