EUR/USD: 2-way trades on the day – OCBC
|Euro (EUR) consolidated near recent highs, following confirmation of a trade deal between US and Europe, with a tariff of 15% on most EU imports while EU plans to invest $600bn in the US and increase its purchases of US energy and military equipment. Euro (EUR) was last at 1.1675 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Daily momentum is not showing a clear bias
"It was reported that German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany's export-driven economy and its large auto sector hard. European Commission President Ursula said later at a news conference that the 15% rate would be all inclusive, wouldn’t stack on top of industry-specific tariffs and would cover drugs, chips and cars."
"Metals duties 'will be cut and a quota system will be put in place'. Currently, there is a 50% tariff on steel and aluminium. With a trade deal on hand and ECB nearing end of easing cycle, there is room for EUR to strengthen further over time. But near term, US data risks are aplenty this week – hotter-than-expected print may still be supportive of USD."
"Daily momentum is not showing a clear bias. 2-way trades likely. Resistance at 1.1780, 1.1840 levels. These levels need to be taken out for bulls to reassert. Support at 1.1630 and 1.1570 levels (50 DMA). This week brings 2Q GDP (Wednesday); CPI estimate (Friday)."
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