The EUR/USD cross trades in a very soft tone early in American session, currently around 1.1650. This action comes as the couple remains above their old highs. Only proven a very tight 30 pip range since the new trading day started. Recent positive economic indicators along with the simmering trade war between the United States and China are quickly changing market dynamics. This change in priority has distracted attention from the Eurozone’s abysmal economic success.
The daily picture for EUR/USD shows a clear, bearish picture with the pair trading below all the moving averages. On this new model, sellers have taken the reins. The 20 and 100 Simple Moving Averages (SMA) are converging around the 1.1670 to 1.1680 area, creating a ceiling that limits further upside. This is the location of a mildly bearish 20 SMA at around 1.1680, adding further strength to this resistance.
The EUR/USD finds a lot of buying power near the 1.1640 area. Further support is seen at 1.1590 and then again at 1.1540. The technical indicators for EUR/USD show a retreat from their midlines, maintaining modest downward slopes within negative territory, indicating ongoing bearish sentiment in the market.
Recent economic data continues to feed this soft tone in EUR/USD. In August, the Eurozone’s seasonally adjusted Current Account showed a surplus of €11.9 billion. This figure was well below the originally foreseen €22.5 billion. This negative development is further bad news for the Euro’s appreciating currency against the US dollar. Additionally, Germany’s Producer Price Index (PPI) for September printed at -0.1% on a monthly basis, underperforming against expectations of a 0.1% increase but showing improvement from the previous month’s decline of -0.5%.
Additionally, for EUR/USD, external factors—like US-China trade tensions, for instance—have affected the trade by adding weight to the overall negative sentiment. Just the other day, President Trump was urging Beijing to purchase more American soybeans. He similarly urged action on fentanyl-related issues to forestall imposition of new tariffs. He emphasized that “China has to give us things,” highlighting the ongoing negotiations that could influence global trade dynamics, including forex markets.
Together, the balancing act of these economic indicators and recent geopolitical developments provide a complicated and cautious EUR/EUR landscape. Market participants are watching all these factors very closely. They are retaining an overall bearish bias to move with any sentiment changes that can alter EUR/USD’s path in the next few sessions at worst.