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EUR/USD: renewed US-China trade tensions may cap gains

  • The EUR/USD’s daily chart is showing a falling wedge breakout.
  • The bearish-to-bullish trend change may fail if the US-China trade tensions escalate.

The EUR/USD closed at 1.1416 on Friday, confirming a falling wedge breakout or bearish-to-bullish trend change.

So, the path of least resistance is now on the higher side. The pair, however, could fall back to ascending (bullish) 5-day exponential moving average (EMA), currently at 1.1366, courtesy of heightened US-China trade tensions. After all, the recently concluded APEC summit failed to produce a trade agreement. Further, the US Vice President Pence on Saturday expressed readiness to double the tariffs on China.  

The greenback may pick-up a strong haven bid if the global equities react negatively to renewed trade tensions.

The pair, however, may capitalize on Friday’s bullish breakout if the equities remain resilient, allowing markets to price in the possibility of a Fed rate pause in 2019. The comments from Fed officials last week revealed the policymakers are getting worried about the risks to the US economy due to the global economic slowdown, housing market, and rising fiscal deficit.

EUR/USD Technical Levels

EUR/USD

Overview:
    Last Price: 1.14
    Daily change: -16 pips
    Daily change: -0.140%
    Daily Open: 1.1416
Trends:
    Daily SMA20: 1.1374
    Daily SMA50: 1.1512
    Daily SMA100: 1.1563
    Daily SMA200: 1.1815
Levels:
    Daily High: 1.142
    Daily Low: 1.132
    Weekly High: 1.142
    Weekly Low: 1.1216
    Monthly High: 1.1625
    Monthly Low: 1.1302
    Daily Fibonacci 38.2%: 1.1382
    Daily Fibonacci 61.8%: 1.1358
    Daily Pivot Point S1: 1.135
    Daily Pivot Point S2: 1.1284
    Daily Pivot Point S3: 1.1249
    Daily Pivot Point R1: 1.1451
    Daily Pivot Point R2: 1.1486
    Daily Pivot Point R3: 1.1552

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