EUR/USD analysis: trade war returns, dollar suffers

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1535

The American currency was hit hard by headlines indicating renewed tensions between the US and China.
US September CPI numbers to be out this Thursday.

The EUR/USD pair regained the 1.1500 level and advanced up to 1.1543, its highest for this week, as trade war fears returned with a vengeance. The dollar came under selling pressure amid comments from US Treasury Secretary Steven Mnuchin who said that China shouldn't weaken its currency as long as the differences between the two countries remain unsolved, further adding that the renminbi should be part of any possible trade deal. Italian-related concerns were moved to the background, while US Treasury yields influence was also limited, although the 2-year note yield jumped to 2.90%, its highest level since June 2008. US data failed to impress, adding pressure on the greenback. According to the official releases, the September Producer Price Index advanced 0.2% MoM and by 2.6% YoY, this last, missing the market's forecast of 2.8%. Also, Wholesales Inventories increased in August 1.0%, surpassing the previous 0.8%. Little has to offer the EU this Thursday, at least, according to the calendar, while the US will unveil September CPI foreseen up by 2.4% YoY.

European currencies were the ones more benefited from broad dollar's weakness, further boosted by renewed hopes about a Brexit deal. As for the common currency, the intraday advance is still short of confirming an interim bottom at the low set last week in the 1.1460 price zone. Nevertheless, the pair has a short-term positive tone, as it recovered above the 23.6% retracement of its latest daily decline, now an immediate short-term support at around 1.1520. In the 4 hours chart, the pair advanced above a now flat 20 SMA, and while technical indicators advance within positive levels, the price is still developing below the 100 and 200 SMA, with the shortest crossing below the largest and both above 1.1600, indicating that in the longer run, the risk remains skewed to the downside.

Support levels: 1.1460 1.1420 1.1475

Resistance levels: 1.1500 1.1530 1.1565

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold moves away from one-week low, climbs above $4,450 as USD edges lower ahead of CPI

Gold builds on its modest intraday recovery from the $4,300 neighborhood, or a one-and-a-half-week low, touched earlier this Friday, and climbs above $4,350 heading into the European session. The upside potential, however, seems limited as traders opt to wait for the release of US consumer inflation figures before placing directional bets.

Cardano approaches critical support as correction risks grow

Cardano (ADA) recovers slightly, trading at $0.206 at the time of writing on Friday, inches above the critical support zone after losing more than 6% so far this week. Weakening derivatives data and fading bullish momentum suggest a bearish near-term outlook, with a decisive close below the support zone potentially triggering a deeper correction for ADA.

US core CPI data set to ease in August as markets reprice Fed September rate decision

The US Bureau of Labor Statistics will publish the August Consumer Price Index data on Friday. The report is expected to show a small decline in annual core inflation. Any divergence from analysts’ estimates could influence the Federal Reserve’s policy outlook and impact the US Dollar’s valuation.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.