EUR/USD drops to lows near 1.1430, US-China trade talks ‘going very well’

The pair’s bull run struggled to move beyond 1.1480/90.
DXY gathers fresh traction and challenges the 96.00 mark.
Trump remains optimistic on ongoing US-China trade talks.

Pablo Piovano FXStreet

The selling pressure is now picking up extra pace around the shared currency, forcing EUR/USD to drop and print fresh daily lows in the 1.1425/30 band.

EUR/USD focused on trade, data

Spot came under renewed downside pressure today despite positive news from the US-China trade talks (according to President Trump’s tweet) spurred the sentiment in the risk-associated space, pushing US futures and yields higher.

In the meantime, the greenback manages to reclaim the 96.00 handle amidst the current rebound from daily lows near 95.70 when tracked by the US Dollar Index (DXY).

Data wise in Euroland, German Industrial Production sunk 1.9% in November from a month earlier, while Business Climate in the bloc dropped below estimates to 082 for the last month.

In the US, the NFIB index surprised to the upside at 104.4 in December ahead of November’s JOLTs Job Openings figures due later.

What to look for around EUR/USD

As investors remain well centered on the US-China trade talks, the probability that the Fed could refrain from acting on rates this year should be the other key issue lingering over global markets in the months to come. In addition, upcoming data releases in the US economy will be under close scrutiny against the backdrop of rising speculation that a deceleration in the growth pace could be in the offing.

EUR/USD levels to watch

At the moment, the pair is losing 0.35% at 1.1433 and a break below 1.1309 (2019 low Jan.2) would target 1.1268 (monthly low Dec.14 2018) en route to 1.1214 (2018 low Nov.12). On the upside, immediate hurdle aligns at 1.1485 (high Jan.7) followed by 1.1497 (high Jan.2) and finally 1.1502 (high Nov.7 2018).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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