The EUR/USD is now above 1.1700. I like enter short at 1.1775 with a stop loss at 1.1900 and a profit target of 1.1500.
EUR/USD 240 min Chart - EUR/USD is Rallying
Trade Wars and the ECB
Trade wars are still the thing that is driving forex markets at the moment. And for the most part, it is US President Donald Trump that is leading the charge. Last week, he suggested that the entire $500 billion worth of Chinese imports will be in line for tariffs. He also had a crack at Europe and is looking at imposing tariffs on car imports.
His rhetoric has been hurting the USD and its fall is what has helped lift the Euro. This week the European Commission President Jean-Claude Juncker visits Washington to discuss the tariff saga. And he will be making the case for a tariff break, but will need to bring a decent deal for Trump to listen.
All the trade wars are also overshadowing what is normally a headline event for the EUR/USD, which is the ECB. The ECB meets to deliver its official interest rate decision and the focus is on exactly when that will be. The suggestion is that it will come in Q3 2019. However, Draghi who is a known dove, isn’t all that interested in rate hikes as yet. As it happens his term as President runs out in October of 2019.
Key Economic Data
While the focus is on geopolitics, we have a big number out this week, which is US GDP. We are looking at a rate of 4.1% which is more than double the last reading of 2%.
This is suggesting that the US economy is in a really good position and has fought back hard. All the headlines and trade wars are really taking away from the fact that the US is doing well and by rights the USD should continue to appreciate and put pressure on the EUR/USD.
The EUR/USD has finally managed to break above 1.1700 and is currently around the 1.1750 mark. We have a higher volume area at 1.1800 and 1.1750 and in between that at 1.1775 there has been less volume trade.
That is a good level to look to go short. The USD has pulled back and it is only a matter of time before we retrace.
EUR/USD - Key Levels
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