EURUSD pares gains after Chinese officials said that the phase one trade deal achieved significant progress and added that the US would follow up on its promise to cancel the new tariffs that are due for December 15th on Chinese products. China decided to cancel tariffs scheduled to impose on Sunday. China said a trade deal would effectively manage and solve differences on trade, promote the stable development of China – U.S. relationships.
U.S Retail Sales Weak
The United States Retail Sales (month over month) came in 0.2% below the forecasts of 0.5% in November. The Retail Sales ex Autos came in at 0.1% also below estimates of 0.4%.
The Import Price Index (month over month) came in at 0.2% in line with forecasts for November, while the yearly reading came in at -1.3% above estimates of -3.3%. The United States Business Inventories came in at 0.2% in line with expectations for October.
EURUSD trades 0.08% higher at 1.1136 having hit earlier today the high at 1.1199 but the pullback rejection at that level drove the price below the 200-day moving average. The pair rallied yesterday after the UK elections results and continued today until the phase one trade deal announced. The outlook is positive for the pair but the rejection at 1.12 puts a cap to the upside.
On the technical analysis side the pair has questioned the positive momentum after the last hour pullback. The intense selling pressure that started the last hour might test the daily low at 1.1124. A break below the daily low might open the way for the next support zone at 1.1103 the low from yesterday’s session. If the pair breaks below that support, then the next target to the downside is 1.1067 the 100-day moving average. .
On the other hand, an immediate hurdle to the upside stands at 1.1153 the 200-day moving average and then at 1.1199 the daily top. A credible close above will attract more bulls 1.1230 the high from August 11th.