EUR/USD Forecast: Balanced before Trump's next trade tweet

EUR/USD is trading around 1.1200, sticking to familiar ranges.
Concerns about US-Sino trade talks outweigh upbeat German data.
The technical picture is fairly balanced for the currency pair.

Yohay Elam FXStreet

Will the US impose new tariffs on China? This answer to this question is critical to the next moves in EUR/USD. And a lot depends on tweets from the White House. The crisis in the talks between the world's largest economies weighs on stock markets but the world's most popular currency pair is waiting for more news to react.

China will send a high-level delegation to the US on Thursday in a new round of talks, the first official encounter since President Donald Trump blamed China for backtracking on previous commitments on trade. The Administration is preparing to slap a fresh set of tariffs as early as Friday in order to exert more pressure.

The Federal Reserve does not seem worried. Fed Vice Chair Richard Clarida stuck to the script by reiterating that there is no rush to cut interest rates and that the US economy "is in a good place." Fed Governor Lael Brainard will speak later in the day.

While global shares are falling and the safe-haven yen is rising, the euro holds its ground. The common currency partially enjoys the good news from Germany earlier today. The continent's locomotive reported an expansion of 0.5% in its industrial output in March, better than had been expected. The good news provides some calm after the EU slashed its growth forecasts on Tuesday.

Later today, the European Central Bank will publish its meeting minutes from the latest rate decision, which leaned to the dovish side. Also, President Mario Draghi will speak at an event in Frankfurt, but new comments on monetary policy seem unlikely.

Overall, the main driver today will likely be developments in trade talks which drive sentiment.

EUR/USD Technical Analysis

EUR/USD enjoys a marginally positive Momentum on the four-hour chart and the Relative Strength Index is a tad above 50. The currency pair is trading above the 50 Simple Moving Average, battling the 200 one, and looking up to the 100 SMA. All in all, the picture is a bit bullish, but nothing to get excited about.

1.1220 was a high point earlier this week and serves as the immediate resistance line. The early May swing high of 1.1265 is next and is closely followed by 1.1280 which provided support back in mid-April.

Support awaits at 1.1165 that was a low point earlier this week. It is followed by the swing low of 1.1135 and then by 1.1110, the lowest level that was seen this year.

More: EUR/USD has solid support but it may hesitate on the way up – Confluence Detector

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.