EUR/USD: Dollar selling powers Fiber toward key trendline hurdle
|- EUR/USD is gaining ground on broad-based dollar selling.
- The pair is closing on a crucial trendline hurdle at 1.1140.
- With gold rising amid trade optimism, a breakout looks likely.
The selling interest around the greenback is gathering pace, pushing EUR/USD toward key resistance at 1.1140.
Trade optimism weighing over dollar
The Asian desks offered US dollars, helping EUR/USD rise from 1.1069 to 1.1119, possibly due to optimism on the trade front.
US President Donald Trump said on Tuesday that he and Chinese President Xi Jinping will have a ceremony to sign the phase-one of the trade deal reached earlier this month.
"We’ll be having a quicker signing because we want to get it done. The deal is done, it’s just being translated right now," Trump told reporters.
The easing of trade tensions is good news for Germany. The 18-month US-China trade war had pushed the Eurozone's manufacturing powerhouse and biggest economy to the brink of recession.
As a result, the dollar could continue to lose ground in Friday's European session – more so, as the equity market buoyancy is expected to continue with Amazon, the e-commerce giant, reporting record holiday season.
Note that MSCI's all-country world index and Wall Street's Dow Industrials, the benchmark S&P 500 and the technology-rich Nasdaq all closed at record highs on Thursday, according to Reuters.
Gold is rising
Gold is currently trading at $1,513 per oz, the highest level since Sept. 3, and could challenge September highs above $1,555 in the first quarter of 2020, as the weekly chart is reporting a bull flag breakout.
The yellow metal usually moves in the opposite direction of the greenback and is widely considered a hard currency.
So, the ongoing broad-based US dollar sell-off looks to have legs. Put simply, the odds of EUR/USD finding acceptance well above 1.1140 – the resistance of the trendline connecting September 2018 and June 2019 highs – are high.
Technical levels
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