- US/China trade talks seem to have put a bid under the EUR.
- A close today above previous day’s doji candle high of 1.1355 would confirm a temporary bull reversal.
Riskier assets and the EUR scored gains in Asia, possibly due to the news that Chinese officials will be traveling to the United States for trade talks in late August.
At press time, the EUR/USD is trading at 1.1385 – up 0.33 percent on the day.
A Reuters report released earlier today quoted China’s Ministry of Commerce as saying that a Chinese delegation led by Vice Minister of Commerce Wang Shouwen will hold talks with US representatives led by Under Secretary of Treasury for International Affairs David Malpass later this month.
The announcement seems to have boosted risk assets. For instance, the AUD/USD is up 0.40 percent and the USD/JPY is reporting marginal gains despite the BOJ rate hike talk.
As a result, the EUR turned higher in Asia and could extend gains further in the European and US session if the equities react positively to the news of US/China trade talks.
Technically speaking, a close today above 1.1355 would validate the previous day’s dragonfly doji candle and confirm a bearish-to-bullish trend change. The relative strength index (RSI) is also rising from the overbought territory.
So, while there is a reason to be optimistic here, the bulls are still cautioned against being too ambitious as the US Treasury has not responded to the announcement from Beijing.
EUR/USD Technical Levels
Support: 1.1357 (200-week moving average), 1.1336 (session low), 1.1301 (previous day’s low)
Resistance: 1.14 (psychological level), 1.1433 (weekly high), 101464 (100-week moving average)
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