- The EUR/USD continues trading below 1.1600, not going anywhere fast.
- Concerns about trade grab the headlines, and the mood is slightly damp.
- The technical picture continues pointing to further falls for the pair.
The EUR/USD is trading in the mid 1.15s, in a relatively limited range. The panel discussion that featured European Central Bank President Mario Draghi and Fed Chair Jerome Powell did not provide earth-shattering news as both influential central bankers repeated their messages. In general, the ECB is very cautious about moving to the exits while the Fed is very optimistic about the US economy. This drove the pair lower last week but did not affect yesterday.
Concerns about global trade continue grabbing the headlines. Markets fell sharply early in the week on the news that the US is considering slapping a 10% tariff on Chinese goods worth $200 billion. China said it would respond and stated that the move hurts the US economy. When markets dropped, the EUR/USD fell as well. However, the rout did not last for too long, and the pair stabilized.
This calm may not last for too long. The European Union also suffered Trump's strict approach when the US imposed tariffs on steel and aluminum early in the month. The EU is set to retaliate as early as Friday with duties on a relatively minuscule €2.8 billion worth of US goods. Nevertheless, every shot in the trade war has detrimental consequences. The US may respond swiftly.
The scale of the tariffs imposed so far is modest, but the implications are broader. Daimler, the company behind Mercedes Benz, lowered forecasts for 2018 and put the finger on tariffs as the culprit for these lower forecasts after having enjoyed record profits earlier. There are other reports about postponing investments.
Later today, the US publishes weekly jobless claims and the Philly Fed Manufacturing Index. See how to trade the event with EUR/USD.
Also, the ECB publishes its Consumer Confidence measure, which was around 0 last time.
EUR/USD Technical Analysis
-636651665423768103.png)
The pair continues its gradual descent accompanied by downside momentum and the Relative Strength Index (RSI) hovering above 30, the level that separates further falls from oversold territory.
The pair saw daily lows of 1.1530-1.1540 in recent days, and this area serves as the first level of support. The 2018 trough of 1.1510 is already a robust support line. Below, we are already looking at levels last seen in 2017: 1.1480 and 1.1420.
On the topside,1.1610 is the initial level to watch after providing support earlier this month. A more robust resistance line is 1.1650 which held the pair down earlier this week. 1.1730 was the bottom of the range before the collapse on June 14th.
More: EUR/USD path of least resistance is down after the consolidation – Confluence Detector
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.