FWirePro: EURUSD hits 4- week low on trade escalation, markets eye European election

EURUSD hits 4-week low at 1.11291 on account of US-Sino trade tension and Brexit uncertainty.US -China 11th round of talks happened on May 5th in Washington but ended with no trade deal. US imposed further tariffs to Chinese products from 10% to 25%. and to counter this China increased tariff of 5000 US products. In previous week US President blacklisted Chinese telecom major Huawei. So ongoing escalation in trade war is supporting safe haven like US. Fed has clearly mentioned in yesterday minutes that there is no plan for rate cut this year. The Fed’s stance boosts USD.Germany flash PMI services and manufacturing data came slightly weaker than expected. European parliament elections voting starts today and results will be published on Sunday.Any chance of Populist coming to power will have negative impact on Euro.It is currently trading around 1.11369.

US 10 year and German bund spread is narrowing from 258 basis point to 246 basis point. On the higher side, any convincing close above 1.1180 confirms minor bullishness and a jump till 1.12240/1.12650 is possible. Any break above 1.12650 confirms major bullishness.the minor resistance is around 1.1160

The near term support is around 1.1100 and any violation below targets 1.1070/1.1050.

It is good to sell on rallies around 1.1178-80 with SL around 1.12240 for the TP of 1.1100/1.1070.