EUR/USD surrenders early gains to 1.1720 supply zone
| • A fresh escalation in the US-China trade spat provides a minor lift to the USD.
• Draghi’s scheduled speech does little to influence the shared currency.
The EUR/USD pair quickly retreated around 30-40 pips from session tops and is currently placed near the lower end of its daily trading range, around the 1.1680-85 region.
The latest leg of sudden fall in the past hour or so could be attributed to a modest US Dollar rebound, supported by growing fears about a full-blown trade war between the world's two largest economies.
The ongoing US-China trade spat escalated further after China, in an official statement, said to levy retaliatory tariffs in response to the US President Donald Trump's latest tariffs on around $200 billion worth of Chinese imports.
Meanwhile, the ECB President Mario Draghi's scheduled speech in Paris turned out to be a non-event as it had little to offer on the central bank's monetary policy or the economic outlook and mainly covered treatment of non-performing loans.
In absence of any major market moving economic releases, the USD price dynamics and any fresh trade-related headlines might continue to influence the pair's momentum through Tuesday's trading session.
Technical levels to watch
The 1.1720-30 region remains an immediate strong hurdle to conquer, above which the pair seems all set to aim towards reclaiming the 1.1800 handle. On the flip side, sustained weakness below the 1.1670-65 region (100-day SMA) might turn the pair vulnerable to fall back towards testing the 1.1610-1.1600 support area.
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