EUR/USD analysis: trade war hits back, USD wins
|EUR/USD Current price: 1.1622
- News that Trump wants to go on with tariffs on China despite talks, boosted the greenback.
- EUR/USD has a relevant support at 1.1570, bearish pressure to increase below it.
After being under pressure for most of the week, the greenback recovered a good chunk of the ground lost against most major rivals, amid a return of trade war concerns and upbeat US data. The EUR/USD pair retreated from a monthly high of 1.1721 to close at 1.1622, following headlines that US President Trump, was said to want to go on with tariffs on $200B on Chinese goods, despite talks. Over the weekend, sources said that the announcement could be made as soon as this Monday. Meanwhile, Consumer sentiment in the US rose in September to 100.8, its second-highest since 2004, according to the University of Michigan, with gains widespread across all major socioeconomic subgroups. Escalating global trade tensions could benefit the greenback at the weekly opening. At the beginning of the week, the EU will release its August inflation figures, with core yearly CPI foreseen at 1.0%, matching the previous month figure.
From a technical point of view, the pair is at risk of extending its latest decline, as it settled below the 23.6% retracement of the August rally. In the daily chart, the pair is also a few pips below its 20 and 100 DMA, while technical indicators gain bearish strength, the Momentum below its mid-line and at its lowest for the month, and the RSI currently at 52. In the 4 hours chart, technical indicators retreated from oversold readings to enter negative territory, while the pair has also finished below its 20 and 100 SMA, all of which leans the scale toward the downside. The pair has found support these last few days at the 38.2% retracement of the mentioned rally at around 1.1570, the next relevant support for the upcoming sessions.
Support levels: 1.1600 1.1570 1.1530
Resistance levels: 1.1660 1.1700 1.1735
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