The EURUSD pair has been trading flat for majority of Asian session on Wednesday, ahead of a meeting between U.S. President Donald Trump and European Commission President Jean-Claude Juncker at a time investors are focused on the trade rift between the two economic powers. The pair moved up above 1.1700 handle in European session yesterday after mixed results of Euro zone PMI was released. The pair hit yesterday’s high at 1.17169 post which the pair started moving downtrend. US PMI’s were mixed as well with Manufacturing PMI better than forecast at 55.5 while service PMI was slightly dovish at 56.2 when compared to previous reading at 56.5. The decline in pair towards USD’s favor could be viewed as a result of multiple key news that hit the market such as a strong U.S. corporate earnings and hopes that China will boost fiscal support for its economy, while long-term U.S. yields hovered near six-week highs on speculation the Bank of Japan could be less accommodative.
EURUSD Back in Range
Currently the EURUSD pair is at 1.1683 seeing 0.04% decrease in value and the pair has been trading in a very tight range for majority of Asian session today morning. Fears of a trade war with the United States kept the euro trapped in narrow ranges as Juncker travels to Washington today for trade-focused talks with Trump. The talks come after the U.S. imposed tariffs on EU steel and aluminum and Trump’s threats to extend those measures to European cars. German data was generally on or better than expected firm while the French numbers were mildly disappointing in yesterday’s macro calendar update. Overall, the data remain comfortably in expansion territory following the broader deceleration in activity earlier in the year. Broader sentiment may well be shaped by the outcome of US-EU trade talks in Washington between President Trump and EC President Juncker.
Investors are also on lookout for news and proceedings of various geo-political events such as US-China trade war and US-Iran sanctions on Oil trade. Today’s calendar schedule in European market remains relatively silent except for German Ifo Business Climate Index which is predicted to be slightly dovish at 101.6 when compared to previous readings at 101.8, while US market will see New Home Sales data for June and Crude Oil Inventory data. Ahead of the meeting, Bloomberg reported that the EU seeks that Trump suspends tariffs in order to get a trade deal. Meanwhile, Trump called for a free trade deal with the EU late-Tuesday. This week’s event risk remains the ECB policy decision due tomorrow, with markets expecting a long period of inaction until an ECB rate hike next summer. Ahead of Trump-Juncker talks, the pair is expected to remain trapped within yesterday’s 60-Pip trading range. Expected support and resistance for the pair are at 1.1650 / 1.1620 / 1.1590 and 1.1750 / 1.1790 / 1.1825 respectively.
This article was originally posted on FX Empire
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