EURUSD consolidates close to two-week highs at 1.1073 as investors turn cautious after the escalation in trade tensions between U.S. and France. Yesterday, U.S. President Donald Trump announced tariffs on aluminium and steel imports from Argentina and Brazil and threatened to impose tariffs on France imports as retaliation to the tax imposed by the French government on U.S. tech companies. European Commission replied to Presiden Trump’s threats saying that EU will act as one on US tariffs on French products.
President Trump in a comment earlier in London said that the U.S. – China trade deal might come after the U.S. election on November 2020.
On the data front, the European Monetary Union Producer Price Index (year over year) came in at -1.9% in line with forecasts for October, the monthly reading came in at 0.1%, topping expectations of 0%. US dollar was under selling pressure yesterday after disappointing manufacturing data from the U.S.
ECB and FED Watch
Pablo de Cos, a European Central Bank Governing Council member, said that lower interest rates for an extended period could spur risk-taking and threats to the financial stability and could also hurt the banking transmission channels of ECB monetary policy. Fabio Panetta an ECB Board nominee, said that ECB must be alert to any unintended consequences of current monetary policy but for now the benefits, overwhelming the side effects.
EURUSD traders expect that the Fed will keep interest rates unchanged at it’s December policy meeting.
Investors await the ISM-NY Business Conditions Index and ISM-NY Current Business Conditions data that will be released at 14:45GMT.
EURUSD made fresh two week highs yesterday amid USD weakness across the board after disappointing manufacturing data from USA. The pair tested the support at 1.10 yesterday and rebounded sharply to two-month highs.
On the technical analysis side the momentum is positive now for the short term as the pair trades above the 100 and 50-day moving averages. Looking north, immediate resistance stands at 1.1086 today’s high, a break above that level can lead EURUSD price up 1.11 and then at 1.1161 the 200-day moving average.
On the downside, first support stands at 1.1065 daily lows, a break below that level might lead price down to 1.1041. In the case the pair breaks below that support level next target to the downside stands at the low from yesterday’s session at 1.1002.More content