- EUR/USD in downside consolidation phase, looks vulnerable.
- EU-US trade tensions could further boost the safe-haven USD.
- German/US virus stats, risk trends and ECB minutes in focus.
Following Wednesday’s 75-pips sell-off, EUR/USD is looking to extend the downside below 1.1250, as the bears fight back control ahead of the European open.
US dollar continues to draw safe-haven flows
The negative sentiment on the global markets amid rising new cases of coronavirus in the Americas, Germany, Australia and China continued to fuel the safe-haven demand for the greenback across the board.
Meanwhile, fresh US-China trade tensions also boosted the dollar bids. White House Trade Adviser Peter Navarro threatened retaliatory tariffs should China not buy enough US lobsters under the phase one trade deal.
Meanwhile, the Trump Administration calling Hauwei and other Chinese technology companies a part of the country’s military also added to the conflict between the two countries, as the US dollar index flirted with a three-day top of 97.31, up 0.13% on the day.
EU-US trade war intensifies
On the EUR-side of the equation, the shared currency remains vulnerable after the US said it’s considering imposing new tariffs on $3.1 billion of imports from the EU and the UK, in light of the aerospace subsidies. In response, Brussels criticized the US tariffs by saying that it will be ‘very damaging’.
However, the bulls could be offered some respite from the expectations on the European Union (EU) recovery fund. The European Central Bank (ECB) monetary policy meeting’s minutes could also save the day for the common-currency.
EUR/USD technical levels
Having breached the 100-SMA on the four-hour chart, EUR/USD remains exposed to further downside risks, with eyes set on the 1.1200 level. Alternatively, the buyers could test the 1.1280 resistance area should the spot attempt a tepid bounce.
EUR/USD additional levels
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