• The EUR/USD is trading above 1.15, pushed up by Trump's comments.
  • The ECB's dovishness and trade could limit the upside.
  • The charts show slightly overbought conditions for the pair.

The EUR/USD is trading above 1.1500, significantly higher than in Monday's morning trade but below the fresh highs of 1.1542. US President Donald Trump sent the US Dollar down by commenting on the Fed's policy once again. He criticized the central bank for raising rates and said he will continue doing so. He expressed his disappointment that Powell is not a "cheap money man" and criticized the EU and China for manipulating their currencies.

The US Dollar reacted with a downfall that extended beyond the immediate impact. Will the Fed react and move to a more dovish policy? Or will they fiercely defend their independence? Markets are still trying to make up their minds, and this may explain the hesitance of the pair to the upside.

Another reason for the current consolidation is the expectation that the European Central Bank's Meeting Minutes, coming out on Thursday, will remain dovish. In the recent meeting, President Mario Draghi clarified that the Bank will not raise rates before September 2019. It will be interesting to hear their tone about trade relations.

Another factor that causes concern is the global trade. While China and the US are talking, the US is still moving forward with levies worth $16 billion of Chinese goods. There are no indications that the this has been frozen.

On Monday, Germany's central bank, the Bundesbank, said it expects slightly slower growth for Q3 after a robust Q2. There are no market-moving events planned for today.

EUR/USD Technical Analysis

EUR USD Technical Analysis August 21 2018

The EUR/USD broke above the uptrend channel, a bullish sign. In addition, Momentum is looking robust and the pair made a decisive break above the 50 Simple Moving Average on the four-hour chart. On the other hand, the Relative Strength Index (RSI) is above 70, indicating overbought conditions.

1.1545 is the recent high and the first line of resistance. 1.1575 supported the pair when it traded on the higher ground early in the month. 1.1620 was a stubborn cap around that period as well.

1.1508 serves as support after serving as the 2018 low for quite some time. 1.1445 capped the pair on a recovery attempt on Monday. 1.1365 was the initial low before the pair set the current 2018 trough at 1.1300.

More: EUR/USD well supported after the surge but resistance is close – 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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

AUD/USD: On the back foot below 0.6600 amid coronavirus fears

AUD/USD declines to 0.6592 during the early Monday morning in Asia. In doing so, the pair remains on the back foot while extending losses after the gap-down to 0.6600 portrayed at the start of this week’s trading session.


USD/JPY extends losses below 111.50 as coronavirus spreads outside China

USD/JPY declines to 111.45, with the intra-day low of 111.28, amid the initial Asian session on Monday. That said, the pair stays under pressure as coronavirus pushes traders towards risk-safety whereas the pullback in the USD.


What you need to know for the open: Coronavirus risk-off themes rule the waves

The coronavirus remains front and centre of the theme for forex at the start of this week. Friday's close leaves a consolidative tone for today's open, if not a risk-off bias which could continue to fuel a bid into the greenback.

Read more

Gold pulls back from fresh seven-year high to sub-$1670 area

Gold prices rallied to $1,681.25, the highest since February 2013, during early Monday. The yellow metal recently benefited from the rise in the coronavirus cases outside China.

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors