EUR/USD drops further and erases Thursday’s gains

  • EUR/USD continued to slide from weekly highs and approached 1.1600. 
  • The euro weakened amid a report suggesting Trump will impose new tariffs to Chinese goods and after comments to Draghi over the economy. 

The EUR/USD pair kept falling during Friday’s US session, making an important reversal. Earlier reached 1.1720, a 2-week high and when it seemed ready to test August’s highs turned to the downside. From the top, lost more than a hundred pips. 

Recently hit a fresh daily low at 1.1622. Near the end of the week was hovering around 1.1625, up 60 pips from the level it had a week ago but far from the highs. 

The recent slide accelerated after Bloomberg reported that US President Trump wants to proceed with new tariffs to Chinese's goods worth $200 billion despite new talks. On a different story, Reuters, mentioned that some European Central Bank policymakers wanted President Draghi to take a more cautious tone on the economy according to two sources familiar with the matter. The euro also hit fresh lows versus the pound and the Swiss franc during the last hours. 

EUR/USD: key levels

The pair is about to post a weekly gain but it moved significantly off highs and also back under the 20-week moving average (1.1680). All signals difficulties for the euro to sustain gains. It needs to break the 1.1740/50 resistance area in order to clear the way to more gains. 

As long as it remains capped by the weekly 20-MA and also under 1.1740, EUR/USD is likely to move sideways around 1.1650. A slide back below 1.1500 could clear the way to more losses and a potential slide to test 2018 lows. 

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