EUR/USD: Key resistance scaled ahead of Draghi's speech, US-China trade talks pivotal


  • EUR/USD has violated the stiff 21-day moving average resistance. 
  • The pair could rise to 1.11 next week if the US-China trade talks end with a partial deal. 

The EUR/USD pair has found acceptance above a key hurdle and could see an extended relief rally in the short-term if the ongoing US-China trade talks end on a positive note.

The currency pair closed above the 21-day moving average (MA) on Thursday, signaling a continuation of the recovery rally from recent lows near 1.0879. The 21-day MA capped the upside for five straight days, starting from Oct. 3 to Oct. 9.

The European Central Bank (ECB) President Draghi is scheduled to speak at 09:30 GMT. The outgoing President is expected to reiterate his dovish stance. The EUR, however, may show resilience, as the markets seem to have priced in the ECB's recent easing. Also, currently the focus is on the dovish Federal Reserve expectations and the US-China trade talks.

All eyes on US-China trade talks

The US and China are currently in the midst of high-level trade negotiations in Washington.

President Trump said in a tweet in the Asian session that he will meet China's Vice Premier Liu He on Friday, raising hopes that the two sides could make progress on trade issues.

Moreover, expectations of a partial trade deal have been built in the market place following Thursday's Bloomberg report on a potential US-China currency pact.

The EUR will likely challenge Sept.13's high of 1.1110 next week if there is a partial deal, leading to a suspension of the planned US tariff hikes – the US is scheduled to increase duties on $250 billion worth of Chinese goods from 25% to 30% on October 15. Also, a 15% tariff on an additional $160 billion worth of Chinese imports is also expected to kick in on December 15, according to CNBC.

However, if the talks fail, the US will likely go ahead with the planned tariff hike, leading to risk aversion and a drop in EUR/USD.

The final German Consumer Price Index for September scheduled for release at 06:00 may be ignored by the markets unless there is a significant revision to the preliminary figures released earlier this month.

EUR/USD

Overview
Today last price 1.1015
Today Daily Change 0.0004
Today Daily Change % 0.04
Today daily open 1.1011
 
Trends
Daily SMA20 1.0987
Daily SMA50 1.1051
Daily SMA100 1.1145
Daily SMA200 1.1223
 
Levels
Previous Daily High 1.1034
Previous Daily Low 1.098
Previous Weekly High 1.1
Previous Weekly Low 1.0879
Previous Monthly High 1.111
Previous Monthly Low 1.0885
Daily Fibonacci 38.2% 1.1013
Daily Fibonacci 61.8% 1.1001
Daily Pivot Point S1 1.0982
Daily Pivot Point S2 1.0954
Daily Pivot Point S3 1.0928
Daily Pivot Point R1 1.1037
Daily Pivot Point R2 1.1062
Daily Pivot Point R3 1.1091

 

 

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