EUR/USD Price Forecast: Trade deal optimism boosting US Dollar demand

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1112

Easing trade tensions between the US and China boosted the USD and the mood.
Market participants await the US inflation data to be released on Tuesday.
EUR/USD maintains its downward strength, may test the 1.1000 psychological mark.

The EUR/USD pair fell on Monday, trading as low as 1.1072 in the European session, trading at around the 1.1110 level at the beginning of the American session. The US Dollar (USD) soared on relief as the United States (US) and China agreed to roll back massive tariffs for 90 days, following a long weekend of negotiations in which both parts mentioned substantial progress towards a trade deal.

According to the joint announcement, the US will cut extra levies on China from the current 145% to 30%. Reciprocally, China will charge 10% on US imports, down from the previously announced 125%.

Stock markets also welcomed the headlines, with solid gains across Asian and European indexes. Wall Street futures also jumped, aiming to post substantial gains on the first trading day of the week.

Other than that, investors await data. The macroeconomic calendar has little to offer on Monday, but the US will release the April Consumer Price Index (CPI) on Tuesday, while Germany will publish the May ZEW Survey on Economic Sentiment.

EUR/USD short-term technical outlook

The EUR/USD pair daily chart shows it may extend its slide amid a firm downward momentum. Technical indicators maintain their bearish slopes well below their midlines, in line with dominant selling interest. At the same time, the pair has extended its slide below a now mildly bearish 20 Simple Moving Average (SMA), all of which supports lower lows ahead.

In the near term, the risk skews to the downside. EUR/USD trades below all its moving averages, with a flat 200 SMA providing resistance at 1.1195. The 20 SMA, in the meantime, heads firmly lower above it, reflecting sellers’ strength. Finally, technical indicators decelerated their slides, but remain well into negative levels, with the Relative Strength Index (RSI) indicator still heading south at around 23.

Support levels: 1.1070 1.1025 1.0990

Resistance levels: 1.1150 1.1195 1.1240

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold buyers hesitate amid holiday-thinned trading

Gold trades volatile, but within range, as US, China holidays-led thin trading exaggerates moves. The US Dollar extends range play into the US GDP week, with markets pricing at least two Fed rate cuts this year. Technically, Gold tests key support at $5,000; daily RSI still remains bullish.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.