FxWirePro: EURUSD trades lower on weak German IFO data, good to sell on rallies

EURUSD is trading lower for the day after jumping more than 100 pips from Friday's low of 1.10518. The escalation of trade tensions between US-China is a major factor for price movements. US President tweeted that existing 25% tariffs will be increased to 30% on $250 billion from Oct 1 and tariffs on $300 billion which has been fixed at 10% previously will be hiked to 15%. German IFO came at slightly weaker than expected at 94.3 in Aug vs forecast of 95.10 which increased the chance of a recession in Germany. The pair declined till 1.10967 and is currently trading around 1.11023.

The US 10 year bond yield has recovered slightly more than 6% after hitting a 3-year low of 1.44%. The spread between US 10 year and 2 -year got inverted which signals recession in US economy.

On the flip side, near term support is around 1.10900 and any violation below that level will drag the pair to the next level till 1.10500/1.0200. Any major weakness only below the 1.1000 level.

The near term major resistance is around 1.11780 and any break above targets 1.1230/1.12860.

It is good to sell on rallies around 1.1150-525 with SL around 1.11850 for the TP of 1.1060.