EUR/USD analysis: USD regains some poise at the end of the day
EUR/USD Current price: 1.1654
- EUR/USD ended up losing ground after the latest trade war developments.
- The pair would need to break either below 1.1620 or above 1.1730 to gain some directional strength.
The American dollar suffered after the latest trade war developments, losing ground against most major rivals but those considered safe-havens, as equities' relief rally played against them. The financial world gyrated once again around trade war headlines. The day started with US President Trump finally announcing that tariffs on Chinese goods worth $200B will come into effect next September 24, with China retaliating by announcing tariffs on $60B on US goods, also by filing a complaint to the World Trade Organization on the latest U.S. tariff measures. The EUR/USD pair settled once again below the 1.1700 figure, after failing to sustain gains beyond the mentioned level, despite broad dollar's weakness. Trump said in the US afternoon that he is always open to talking with China, although China seems not to be thinking the same, while warned that if the Asian country retaliates against agriculture or industry, more tariffs will be underway, which ended up giving the greenback some support by the end of the American session.
The macroeconomic calendar had nothing of relevance to offer as only the US released some minor figures, including the Redbook to September 14, and the NAHB Housing Market Index for September, which beat expectations with 67 vs. the forecasted 66. Wednesday won't be much more interesting for EUR/USD as both economies will offer minor releases among which, US housing data outstands. US Treasury yields soared to their highest since last May amid ramping trade tensions, backing the greenback's recovery at the end of the day.
The EUR/USD pair holds at the upper half of this weeks' range but the repeated failure to break through the 1.1720/30 resistance area seems to be discouraging bulls. The 4 hours chart shows that the pair is now breaking through its 20 SMA from above, still holding above the 100 SMA at around 1.1630, where the pair also has the 23.6% retracement of the August rally. In the same chart, the Momentum indicator lacks directional strength around its mid-line, while the RSI gains downward traction but within neutral territory. A steeper decline could be expected on a break below the 1.1620/30 area, while only beyond 1.1720 bulls will be more convinced.
Support levels: 1.1660 1.1620 1.1570
Resistance levels: 1.1725 1.1750 1.1785
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.
