EUR/USD trades weak on Trump’s trade war escalation. It hit an intraday low of 1.16541 and is currently trading around 1.16795. Overall trend remains bearish as long as resistance 1.18295 holds.
Urgent trade talks are underway between the United States and the European Union to prevent President Trump's upcoming 30% tariff on all EU imports, set for August 1. Commissioner Maros Sefcovic noted the proximity to a consensus. He also said that the planned tariffs would greatly obstruct transatlantic commerce. The August 1 deadline is crucial; should no agreement be made, the EU is ready to impose "well-considered, proportional countermeasures," particularly affecting the pharmaceutical, automotive, and aerospace equipment sectors. Despite both sides' declared dedication to talks, the possibility of a major increase in the trade conflict remains high.
The pair is holding below the 55 EMA, above the 200 EMA, and the 365 EMA in the 4-hour chart. Near-term resistance is seen at 1.1720; a break above this may push the pair to targets of 1.1765/1.1800/1.1835/1.19090/1.1956/1.200. Major bullish momentum is likely only if prices can break above the 1.200 targets, 1.2100. On the downside, support is seen at 1.16800; any violation below will drag the pair to 1.1680/1.1660/1.1600.
Market Indicators and Trading Strategy
Commodity Channel Index (CCI)- Bearish
Average Directional Movement Index (ADX) - Bearish
It is good to sell on rallies around 1.17438-40 with a stop-loss at 1.1765 for a target price of 1.1600.
