FxWirePro:EUR/USD trades lower on hawkish Fed and renewed trade war, good to sell on rallies

EUR/USD is trading lower and lost more than 80 pips from yesterday’s high of 1.16996 after more hawkish fed policy. Fed has kept its interest rates unchanged at 1.75%-2% and has upgraded the assessment of US economy from solid to strong. This have increased expectations that fed will hike interest rates surely in Sep and Dec.

US ISM manufacturing index came at 58.1 in Jul the lowest since Apr 2018 and below forecast (59.4).

US 10 year bond yield has broken 3% and hits 3.160% highest in six weeks. US has planned to raise the tariffs from previous 10% to 25% on $200 billion worth of Chinese import. The trade war is also supporting the US dollar prices to certain extent.

Major event to be released is US Non Farm Payroll tomorrow which is expected to have more impact.

EUR/USD’s near term support is around 1.1600 and any convincing break below will drag the pair to next level till 1.1500.Any break below 1.1500 confirms minor weakness and decline till 1.1400/1.13600 is likely.

On the higher side, near term resistance is around 1.1687 (200- H MA) and any break above will take the pair to next level till 1.1745/1.1800/1.18515.

It is good to sell on rallies around 1.1645-50 with SL around 1.1745 for the TP of 1.1500.