The US trade war continues to generate volatility and uncertainty across asset classes. Following trade talks over the weekend between the US and China, US Treasury rates have risen, and the dollar has strengthened against its peers.
This movement has pushed EUR/USD back down to around $1.11, with support near $1.109. Additionally, the pair has fallen below the lower Bollinger Band, which could also provide some support. However, there has been an apparent loss of momentum, with the relative strength index (RSI) breaking below an upward trend and declining to 43.
If EUR/USD slips below support at $1.109, the next support level to watch is around $1.094. Conversely, if support at $1.109 holds, this could represent a minor low, potentially setting up a move higher.
Meanwhile, the US dollar is strengthening against its Canadian counterpart, rising towards $1.399. However, USD/CAD is encountering resistance at the 50% retracement level of the decline that began in mid-April, as well as at the upper Bollinger Band. Additionally, the 200-day moving average could serve as resistance, given that USD/CAD fell below this level in April.
If the pair continues to rise, the next significant resistance may only appear at around $1.41. However, a failure to break higher could send USD/CAD back towards the recent low of $1.375.
The recent movements in the above-mentioned currency pairs may be nothing more than a retracement of the US dollar’s tariff-induced weakness. Then again, the greenback’s return to strength could prove temporary as traders continue to assess the ever-changing market landscape under the Trump administration.
Written by Michael J. Kramer, founder of Mott Capital Management.
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
This movement has pushed EUR/USD back down to around $1.11, with support near $1.109. Additionally, the pair has fallen below the lower Bollinger Band, which could also provide some support. However, there has been an apparent loss of momentum, with the relative strength index (RSI) breaking below an upward trend and declining to 43.
If EUR/USD slips below support at $1.109, the next support level to watch is around $1.094. Conversely, if support at $1.109 holds, this could represent a minor low, potentially setting up a move higher.
Meanwhile, the US dollar is strengthening against its Canadian counterpart, rising towards $1.399. However, USD/CAD is encountering resistance at the 50% retracement level of the decline that began in mid-April, as well as at the upper Bollinger Band. Additionally, the 200-day moving average could serve as resistance, given that USD/CAD fell below this level in April.
If the pair continues to rise, the next significant resistance may only appear at around $1.41. However, a failure to break higher could send USD/CAD back towards the recent low of $1.375.
The recent movements in the above-mentioned currency pairs may be nothing more than a retracement of the US dollar’s tariff-induced weakness. Then again, the greenback’s return to strength could prove temporary as traders continue to assess the ever-changing market landscape under the Trump administration.
Written by Michael J. Kramer, founder of Mott Capital Management.
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
Disclaimer
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.