EUR/USD: Downside risks grow on fears of US-China trade talks falling apart

  • EUR/USD closed below key rising trendline on Thursday.
  • Investors may sell risk in Europe on fears the US-China trade talks are falling apart.

EUR/USD is on the back foot, having breached key ascending trendline support on Thursday and risks falling to levels below 1.1150 as risky assets are taking a hit on reports stating that China is no longer interested in trade talks with the US.

The shared currency fell from 1.1220 to 1.1166 and closed below the trendline connecting April 26 and May 3 lows on Thursday, as the 10-year treasury yield rose from 2.36% to 2.41% on the back of strong US data and the chance of a Fed rate cut by December, implied by Fed fund futures, fell from 130% to 120%.

Technicals, therefore, are biased bearish. Further, risk assets may take a hit in Europe, adding to the bearish pressures around the EUR on fears the US-China trade negotiations are falling apart.

Xinhua News Agency reported in Asia that China feels Trump’s approach to trade talks lacks sincerity and there is no point in continuing discussions.

Apart from broader market sentiment, the pair may take cues from the final Eurozone inflation reading for April.

Pivot points

    1. R3 1.1273
    2. R2 1.1249
    3. R1 1.1214
  1. PP 1.119
    1. S1 1.1155
    2. S2 1.1131
    3. S3 1.1096


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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

EUR/USD breaks above 1.1100, first time since end-March

EUR/USD is breaking higher heading into European trading this Friday. The spot conquers the 1.11 handle for the first time since March 30 despite the risk-off market mood amid US-China tensions. Focus on EZ CPI and Trump's response. 


GBP/USD: Mildly bid above 1.2300 as UK enters Sino-American rivalry

GBP/USD probes intraday high after bouncing off lows near 1.2300. UK increases changes for China’s Huawei, offers citizenship to Hong Kong residents. EU’s Trade Chief says UK may have given up on Brexit deal. US President Trump’s presser will be key.


Cardano explodes over 1% in minutes, is $0.07 achievable on Friday?

Cardano is among the most active cryptocurrencies in the market this week. ADA/USD is exchanging hands at $0.0666 amid a battle to beat Thursday highs at $0.0680. On the other hand, the price has not been left behind especially after spiking by over 1% in a matter of minutes.

Read more

Gold pokes $1,721/23 resistance area

Gold prices extend the latest recovery from $1,711 as DXY refreshes two-month low. A confluence of 10-day EMA, nine-day-old falling trend line probes immediate upside. An ascending trend line from April 21 favors the bulls.

Gold News

WTI struggles to cheer USD weakness, drops 1.40% in Asia

WTI probes gradual declines from $34.34, still eyes record monthly advances. DXY bears the burden of risk aversion wave before US President Trump’s China conference. Fears of US-China restrict the black gold’s near-term upside.

Oil News