The EUR/USD currency pair is trading near the 1.1100 level. This increase indicates bullish strength as the US Dollar (USD) faces a fresh wave of weakness. Worries over a U.S. recession are mounting. Consequently, long-standing technical selling pressure is keeping the USD depressed, despite attractive levels to buy USD. The EUR/USD pair is trading very strongly higher today, moving well above the very significant 1.1050 level. Indeed, it appears poised to build on its record wins even more substantially!
There are a number of reasons for the current USD tailspin. One of the biggest reasons, though, is the brutal trade war between the United States and China. To retaliate against all of these tariffs, China has hit back by slapping an 84% added tariff on US products. This action has greatly reduced the USD’s clout. This unfolding has added to concerns of an impending recession, aiding in the dollar’s recent drop.
The EUR/USD is still trading quiet as it awaits the release of the Federal Open Market Committee (FOMC) Minutes. Market participants too are closely watching the text for clues as to what might come next, with major implications for monetary policy. The technical picture looks positive for the Euro, as the pair stays above all of its moving averages. The 20 Simple Moving Average (SMA) is currently at about 1.0970. This advanced level provides strong support to help propel future advances.
Over the last few trading days, the EUR/USD cross has witnessed a phenomenal surge. It has shot up rapidly, making the stage likely for further increases in the months to come. The technical readings on the daily chart indicate potential for continued growth, as the pair aims to break past the immediate resistance level at 1.1100. Some analysts indicate that a more substantial gain might be seen if the pair is able to do so convincingly above this critical level.
While the 1.1100 level’s importance is hard to overstate, it marks an essential battleground for traders looking to gauge the state of market forces. A sustained breakout above this level would likely indicate a shift towards a higher bullish sentiment for the Euro, relative to the Dollar. Market sentiment and other technical indicators suggest that traders may need to be cautious in their approach moving forward. They must beware of possible moves in the EUR/USD.
Sentiment around the USD is now quite precarious. While the future of the saltwater-fishing boom is still murky, many analysts expect it to sink even deeper if economic indicators keep signaling a recession ahead. The trade spats with China further deepen these worries, probably ensuring downward pressure on the dollar in the short term.