The EUR/USD currency pair set a bullish tone in the early part of the week. You can see the extraordinary action as it approached the key 1.1300 area. A sudden sell-off in the US Dollar triggered this increase. Renewed trade jitters and new worries about the US economy added to growing pressure on the currency. As traders digest these developments, the next target for EUR/USD would rest at the May highs just above 1.1380.
In fact, historically, the US Dollar has been under threat. In particular, economic uncertainty caused largely by the ongoing trade war has been a major driver. The recent trade wars have really put a hole in confidence in China’s economy found from a surprise major slowing of economic activity during the month of April. According to reports, this period of slowdown is a symptom of increasing economic concerns impacting global markets.
“China April slowdown shows the impact of economic uncertainty.” – www.fxstreet.com
The EUR/USD pair’s movement was notably influenced by the Greenback’s sharp sell-off. With the dollar on its backfoot, the euro continued to build up steam, driving EUR/USD further up towards the important 1.1300 resistance level. Analysts think that the increase is just getting started. Traders are looking for price to take it out through the May highs near 1.1380.
All the while, market sentiment remains extremely cautious. Renewed trade jitters and fears for the stability of both the US and Chinese economies are casting a long shadow. The chill felt from China’s cooling economic activities has set off warning bells, forcing traders to prepare for increased turbulence.
“EUR/USD: Next on the upside sits the May highs near 1.1380.” – www.fxstreet.com
The interaction among these factors has produced a volatile trading landscape. John Kicklighter — Uncertainties still pressing down on US Dollar. For this reason too, we should expect continued dollars-buying pressure that will shape currency trends in the near term. Traders would undoubtedly want to watch how these exciting developments play out and their effect in determining future exchange rates.