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EUR/USD: Bulls regain poise, 1.1100 back on sight?

  • EUR/USD bounces-off lows ahead of 5-DMA support at 1.1055.
  • Bulls back in charge as broad USD recovery stalls amid trade woes, Trump’s tweet.
  • Focus stays on Eurozone/ US data and trade developments ahead of FOMC minutes.

Having found fresh buyers ahead of the 5-DMA support of 1.1055 in early Asia, the EUR/USD pair is seen heading back towards the weekly tops of 1.1090 amid a pause in broad-based US dollar recovery.

China walking back trade deal

The bulls are back in charge, as we progress towards the European opening bells after the US President Trump’s tweet on relatively higher Fed rates stalled the tepid recovery in the US dollar across its main competitors. The USD index is off the session highs at 97.86 to now trade flat at 97.79. Trump said that he told Powell the Fed Rate is set too high relative to the interest rates of other competitor countries.

The US dollar was downed to two-week lows of 97.68 on Monday after fresh US-China trade deal doubts resurfaced and dampened the investors’ mood. “Trade deal concerns translated into lower US yields, falling stocks, a weaker greenback, and higher demand for safe-havens in financial markets,” FXStreet’s Chief Analyst Valeria Bednarik noted.

According to a CNBC report published overnight, the mood in Beijing was pessimistic about the prospects of sealing the Phase One agreement with the US after Trump said no tariff rollback and as China awaits the outcome on US President’s impeachment row.

Looking ahead, the US-China trade-driven sentiment will remain the main market motor, in light of second-tier macro releases on both sides of the Atlantic. “October’s US housing starts will be released on Tuesday, while investors should be closely following the release of the Federal Reserve’s latest meeting minutes on Wednesday and the  European Central Bank  minutes on Thursday. ECB President Christine Lagarde is due to speak in Frankfurt later in the week,” Valeria added.

EUR/USD Technical levels to consider


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