EUR/USD trades calm, Trump's trade war is officially underway
|- The optimism generated by reports of US-EZ auto deal and hawkish ECB expectations are capping the downside in the EUR.
- However, the calm in the EUR/USD market could be short-lived as Trump's trade war is here.
The US-China trade war has become a reality, however, EUR/USD is showing no signs of stress.
Focus on US-China trade war
The US tariffs on $34 billion worth of Chinese imports have come into effect today at 0400GMT. Further, President Trump has threatened to impose an additional $500 billion tariffs if Beijing imposes retaliatory tariffs in response to initial US tariffs.
Clearly, the world's two biggest economies are closing on a long drawn out trade war, still, the pair is trading flat-lined around 1.1685, having hit a high of 1.1720 yesterday. The downside is likely being capped by more hawkish European Central Bank (ECB) expectations and reports suggesting a possible US-Eurozone auto trade deal.
However, the financial markets may turn risk-averse in European and US session. Hence, the calm in the EUR/USD could be short-lived. Further, the trade standoff could overshadow the monthly US non-far payrolls figure, scheduled for release at 12:30 GMT today.
EUR/USD Technical Levels
Resistance:1.17 (psychological hurdle). 1.1743 (descending 50-day moving average), 1.1852 (June 14 high).
Support: 1.1648 (10-day moving average), 1.1591 (July 2 low), 1.1508 (June 21 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.