- EUR/USD trades in a narrow range ahead of the all-important Trump-Xi Summit.
- Data has not been inspiring on both sides of the Atlantic.
- The technical picture is mixed for the pair.
EUR/USD is trading below 1.1400, in a narrow range, similar to levels seen yesterday. Markets are fixated on the meeting between US President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the G-20 Summit in Buenos Aires.
Trade tops the agenda. The US has already imposed tariffs on a broad range of Chinese goods, and the world’s second-largest economy retaliated. Additional duties are due. Ahead of the meeting, Trump said the US is “close to doing something” with China, but he also stated that he is pleased with the current tariff regime. Deteriorating trade relations have already taken their toll on the global economy and moved currencies.
The meeting is held over the weekend, but reports on preparatory talks from the Argentinian capital can certainly move markets today.
Data on both sides of the Atlantic has been mediocre. German and Spanish inflation fell short of expectations ahead of the euro-zone inflation data. German Retail Sales disappointed once again, this time by dropping by 0.3% in September. The European Central Bank indicated it would raise rates in late 2019, but the odds, according to bond markets, are slipping.
In the US, the FOMC Meeting Minutes had something for everybody. On the one hand, members were pleased by the state of the US economy, but also considered changing the guidance about gradual rate hikes.
Earlier in the week, Fed Chair Jerome Powell downed the dollar with comments perceived as dovish. However, his speech did not prove to be a game changer.
Today, the last day of the week and the month, money managers will be adjusting their portfolios, and this may cause some jitters, especially close to the end fo the European session.
EUR/USD Technical Analysis
EUR/USD is trading in a narrow range, trapped below the 200 Simple Moving Average and the 50 SMA on the four-hour chart. The Relative Strength Index (RSI) and Momentum are marginally positive. The pair is in a wait-and-see mode.
Support awaits at 1.1350 which was a low point on Thursday. Further down, 1.1325 was the trough one week ago. The former double-bottom of 1.1300 is next down the line, and 1.1270 was the low point of the week.
Looking up, 1.1405 capped EUR/USD yesterday. 1.1435 was a high point late last week. 1.1475 was a swing high in mid-November, and 1.1500 was the high point seen early in the month.