EUR/USD – Trump Makes the Greenback Retreat

On Friday, Donald Trump said the Fed and other central banks were manipulating the EUR exchange rate. According to the US President, monetary policy tightening is spoiling everything the White House managed to achieve. Trump attached the Fed policy both in his CNBC interview and on his Twitter account.

In his Twitter post, Trump says the EU, China, and other countries are manipulating their currencies rates, keeping the key interest rates low in the lights of the US rate hikes. The President’s words are quite reasonable, as such ‘manipulation’ leads to the greenback getting stronger, which in its turn makes the US financial system less competitive.

Trump’s criticism is unlikely to provoke any reactions in the market, apart from the immediate ones. Anyway, the Fed is now governed by Jerome Powell, who was actually appointed by Trump; thus, the White House is most likely okay with Powell’s strategy, while this ‘verbal interference’ is hardly anything else that just a formality. This is all very in line with overall Trump’s behavior, though.

Among other things, the ECB meeting is scheduled for this week, while in the US the durable goods data are being released. Overall, there will be not many fundamentals, as it often happens at the end of a month.

Technically, the EURUSD is correcting in the midterm after the previous downtrend. In the short term, meanwhile, the downtrend may end with the resistance breakout. If the price goes higher, it may reach the new ascending channel resistance at 1.1830; after this resistance has been tested, the price may pull back to the support at 1.1680.

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex