- In Tokyo, the euro climbed higher to 1.1747 in the first hourly stick.
- Traders continue to offer the greenback on the back of Trump's accusations that the EU and China of manipulating their currencies and interest rates lower.
EUR/USD rallied to 1.1738 the high, closing at 1.1719 on Friday as the pair traded through the 10, 21 & 55-DMAs last week and is now en route for a test of the July high at this rate, which is located at 1.1790.
Market adjusting and suspecting a full-blown currency war
The market is making further adjustments to the overall positioning in the US dollar, suspecting that the Trump administration is about to ignite a full-on currency war after Trump tweeted his displeasures over the EU and China, calling them out as currency manipulators.
Trump has retaliated by threatening sanctions on $500bln in Chinese exports to the US last year. However, it is worth noting that a full retracement of the USD/CNY’s 2016-18 fall, which is well underway and worth 11.5%, should offset the effect of those tariffs - hence Trump's frustration with rising US rates and USD.
EU’s Moscovici: G20 meeting was not tense, but still trade differences persisted
EUR/USD levels
Analysts at Commerzbank argue that a recovery above 1.1790 will target 1.1855. "Above 1.1855 we look for a deeper retracement to the 1.1930 55 week ma, with scope for the 1.1986 200 day ma, where we suspect that it will fail," the analysts added. Indeed, the daily technicals have shifted in the bulls favour, but only slightly as the longer term outlook is bearish and fundamentally where gains should be tempered by the FED and ECB divergence. Therefore, to the downside, the 200-week moving average is at 1.1390 while 1.1186/1.0814 comes as the 61.8% and 78.6% retracement.
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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.