EURUSD Halts at Resistance US-EU Trade War Escalates
The US-EU trade war seems on the path to escalation, which could have implications for the EURUSD. The US has been awarded costs of $7.5bn from the World Trade Organization in its Airbus subsidies case with the European Union.
This was affirmed by United States President Donald Trump in his Twitter handle:
“The US won a $7.5 billion award from the World Trade Organization against the European Union, who has for many years treated the USA very badly on trade due to tariffs…”
In the meantime, a key EU minister was quoted by Reuters as saying “we are preparing ourselves to react with sanctions” if the US administration were to reject its overtures on the trade dispute over the subsidies granted Airbus. This is according to statements credited to French Finance Minister Bruno Le Maire on Thursday.
A similar case filed by the EU against the US concerning Boeing is still pending.
Trading on the EURUSD is muted in Thursday’s European session, as risk-off sentiment is limiting bids for the US Dollar. With the prevailing weakness on the Euro after the QE program was implemented last month, the EURUSD is in a slow but steady decline.
The EURUSD is presently trading at 1.0968, and is challenging a near-term resistance at that level (low of July 24, 2016 and weekly close of Sep 3 on falling channel return line).
A break above this level continues the price activity within the channel’s borders which may take it to 1.10318 (low of Aug 1 in role reversal).
A failed break resumes the downside move to challenge the channel’s return line, probably at 1.08500 (previous weekly lows of October 2016 and April 2017).