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  • The pair erodes initial gains and now hovers over the 1.1650 area.
  • Upside remains capped by the 1.1675/80 band, recent peaks.
  • Trump threatens with further tariffs on Chinese products.

After reaching the 1.1680 vicinity during overnight trading, EUR/USD has given away those gains and is now situated in the 1.1650 region amidst lack of a clear direction.

EUR/USD looks to trade

Spot climbed, tested and retraced from the 1.1680 region today after President Trump said he favours a weaker greenback while at the same time he criticized the ongoing tightening cycle by the Federal Reserve. Later, in a statement, the White House said that Trump respects the independence of the Fed and that he does not intend to interfere in the central bank’s decisions on monetary policy.

Trump’s comments came in amidst the persistent selling bias around the Chinese Yuan.

Still with Trump, he threatened to impose further tariffs on Chinese imports worth $505 billion, while Chancellor A.Merkel said the EU is ready to retaliate against US tariffs on autos.

Absent releases in both sides of the Atlantic, the trade effervescence between the US, China and the EU is poised to drive the sentiment in the global markets for the time being.

EUR/USD levels to watch

At the moment, the pair is gaining 0.07% at 1.1651 facing the next hurdle at 1.1678 (high Jul.19) followed by 1.1718 (monthly low Dec.12 2017) and finally 1.1746 (high Jul.17). On the downside, a breakdown of 1.1575 (low Jul.19) would open the door to 1.1527 (low Jun.29) and then 1.1508 (2018 low May 30).