On Monday the 26th of August, trading on the euro closed down. The single currency underwent a correction following Friday’s rally, when it rose in response to China’s decision to increase tariffs on US goods. On Monday, the bulls hit a high of 1.1164 after Trump’s decision to increase tariffs on Chinese goods. While the two sides traded blows, China’s Vice Premier Liu He said that China is willing to continue negotiations to resolve the trade dispute.
The safe haven assets went into decline. The US dollar index has corrected following a drop. Markets expect the US and China to keep trying to reach a trade deal. The EURUSD pair slumped to 1.1094.
Day’s news (GMT 3):
- 09:00 Germany: GDP (Q2).
- 11:30 UK: BBA mortgage approvals (Jul).
- 15:00 Eurozone: ECB’s De Guindos speech.
- 16:00 US: S&P/Case-Shiller home price indices (Jun).
- 17:00 US: consumer confidence, Richmond Fed manufacturing index (Aug).
- 23:30 US: API weekly crude oil stock (23 Aug).
The pair has dropped below the balance line. This is a bad sign for the bulls. Considering that the stochastic oscillator is looking down, it’s expected that the pair will rebound from the 67th degree at 1.1085. Trump keeps adding uncertainty on the financial markets, so prepare yourselves for tweets directed at China and Iran. Since the pair is currently in the middle of Friday’s range, it seems more likely that the euro is heading upwards against the dollar. A breakout to the upside of the downwards channel will open the road towards 1.1150.