1.10 remains a key level for EUR/USD traders as we head towards the weekend. Reports that trade talks are “going well” and the possibility of a partial trade deal could be agreed between US and China saw safe-haven demand for the dollar decline, sending the USD index to key support and EUR/USD above key resistance. In fact, EUR/USD has broken out of its bearish channel and shows the potential for a bullish continuation pattern on the lower timeframe.
But ultimately, it all comes down to how trade talks are presented which could impact which side of 1.10 EUR/USD closes on today. If the goods are produced and markets are satisfied with the terms of a partial trade-deal, further upside for Euro appears likely. At least over the near-term. Yet if it turns out to be yet another round of hot air and hype, we could easily see yesterday’s moves reversed to send EUR/USD crashing back below 1.10.
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