EUR/USD Daily Price Forecast – EUR/USD Moves below 1.165 Handle on News of Trump’s Tariffs

After being under pressure for most of the week, the greenback recovered a good chunk of the ground lost against most major rivals, amid a return of trade war concerns and upbeat US data in late North American market hours on Friday. The EUR/USD pair retreated from a monthly high of 1.1721 to close at 1.1622, following headlines that US President Trump, was said to want to go on with tariffs on $200B on Chinese goods, despite talks.  Over the weekend, sources said that the announcement could be made as soon as this Monday. Meanwhile, Consumer sentiment in the US rose in September to 100.8, it’s second-highest since 2004. As of writing this article, the pair was trading at 1.1635 up by 0.10% on the day.

Sino-U.S. Trade War Updates To Become Main Driving Force Despite  Momentum From Regular Macro Update

Amid a broad-based US dollar bullish consolidation in Asia, the EUR/USD pair is seeing some signs of life above the 1.16 handle, which is likely to be short-lived as markets await the announcement of the new US tariffs on the Chinese imports. Escalating global trade tensions could benefit the greenback during today’s market hours as China responded that they would pull out of the trade talks under the renewed tariff threat. Escalating US-China trade angst will continue to keep the buoyant tone intact around the safe-haven US dollar, which is likely to remain as the major driving force for USD in broad market in near future. The Eurozone final CPI release and the US second-liner macro data will play a second fiddle to the US dynamics and trade-related news.

In Eurozone CPI data, monthly reading is expected to drop from 0.3% to 0.2% while yearly reading is expected to remain unchanged. From a technical point of view, the pair is at risk of extending its latest decline, as it settled below the 23.6% retracement of the August rally. In the daily chart, the pair is also a few pips below its 20 and 100 DMA, while technical indicators gain bearish strength, the Momentum below its mid-line and at its lowest for the month, and the RSI currently at 52. In the 4 hours chart, technical indicators retreated from oversold readings to enter the negative territory, while the pair has also finished below its 20 and 100 SMA, all of which leans the scale toward the downside. Expected support and resistance for the pair are at 1.1600, 1.1570, 1.1530 and 1.1660, 1.1700, 1.1735 respectively.