FxWirePro: EUR/USD pares gain on US China trade escalation, good to sell on rallies

• EUR/USD has pared some of the gains made yesterday after US imposed 10% tariff on another $200 bn in Chinese imports. The pair has lost more than 50 pips from the high of 1.17497 made after hitting low of 1.16905. The slight strength in the US dollar index and weaker than expected German ZEW Economic Sentiment has dragged Euro down yesterday. German ZEW index has declined sharply from -16.1 to 24.7 points compared to forecast of -18.0. Markets eye US PPI data which is to be released today and CPI tomorrow for further direction. The flattening of US yield curve is putting pressure on USD. The spread between 2 year and 10 year yield is at 30 basis point lowest level since Aug 2007.
   
• EUR/USD’s near term support is around 1.16500 (20- day MA) and any break below will drag the pair to next level till 1.1600/1.1500.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 1.1750 (50- day MA) and any break above will take the pair to next level till 1.1795/1.1850/1.1900. 

It is good to sell on rallies around 1.1715-20 with SL around 1.1755 for the TP of 1.1845/1.1900