EUR/USD Forecast: Extending the gains with the trade talks extension

EUR/USD trades on the higher ground amid trade talk extension.
A light calendar leaves room for trade and Brexit to have their say.
The technical picture is slightly bullish for the pair.

Yohay Elam FXStreet

EUR/USD is trading in the mid 1.1300s, up on the day. The US has agreed to postpone the imposition of new tariffs on China, a move that was planned for March 1st had negotiations not concluded. While there are no final deals, both sides report progress and satisfaction.

China has agreed to maintain a stable yuan and to buy US goods, while structural topics such as intellectual property and the government's intervention in the economy have not seen progress. A meeting between Presidents Donald Trump and Xi Jinping is due in late March in Florida.

The news sent Asian stocks higher and diminished demand for the safe-haven yen and USD, propping up EUR/USD.

Back on Friday, the picture was murkier for the euro. The German IFO Business Climate came out at 98.5 points, a fourth consecutive decline. German Finance Minister Olaf Scholz acknowledged the slowdown, but still sees an upwards trajectory. The flash PMI, published on Thursday, showed signs of bottoming out in the euro-zone economies.

A light calendar awaits traders today with US final wholesale inventories and a speech by Fed Vice Chair Richard Clarida. Clarida also spoke on Friday and failed to move markets.

Brexit remains an issue for broader markets. With 32 left to go, UK PM May is considering another delay to the vote in Parliament, from this week to March 12th, leaving little time for passing all the laws. However, there are reports of a potential delay by two, three, or even 21 months to the UK's departure. A cliff-edge Brexit will be a major disruption also to the euro-zone. At the moment, optimism prevails.

EUR/USD Technical Analysis

EUR/USD is trading above the 50 Simple Moving Average on the four-hour chart and but below the 200 one. Momentum is almost non-existent and the Relative Strength Index is balanced. All in all, the pair looks listless.

1.1360 serves as an initial cap, holding euro/dollar down earlier in the day and also last week. 1.1372 was the high point last week. It is followed by 1.1390 and 1.1405 that worked as support lines in late January.

1.1330 was a low point early in the day and provides weak support. 1.1315 was a trough on Friday and also converges with the 50 SMA. 1.1295 was a swing low last week and more significant support awaits at 1.1275 which was a swing low last week.

More: EUR/USD has room to push higher if it moves above this resistance line – 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.