EURUSD Technical Analysis – Easing in tariffs danger weakens the USD

Fundamental
Overview

The USD continues to lose
ground as the tariffs fears ease. In fact, tonight Trump said that he would rather not use tariffs on
China which
triggered more weakness in the greenback.

The tariffs risk has been
the only thing keeping a bid under the US Dollar after the US inflation data,
so when that risk eases, the greenback weakens.

On the EUR side, the latest
PMIs showed an encouraging rebound in activity which
triggered a repricing in rate cuts expectations. The market now sees a total of
86 bps of easing by year end which is down from 97 bps before the data release.

EURUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that EURUSD broke above a key resistance zone around the 1.0450 level
confirming the change in trend. The buyers piled in more aggressively to
position for a rally into the 1.06 handle next. The sellers, on the other hand,
will want to see the price falling back below the 1.0450 level to target a
pullback into the 1.0350 level next.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have an upward trendline defining the current bullish
momentum. If we get a pullback into the trendline, the buyers will likely lean
on it to keep pushing into new highs, while the sellers will look for a break
lower to increase the bearish bets into the 1.0350 level.

EURUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have another minor upward trendline defining the bullish momentum
on this timeframe. The buyers will keep on leaning on the trendline to position
for further upside, while the sellers will look for a break lower to target the
next trendline. The red lines define the average daily range for today.

Upcoming
Catalysts

Todaywe
conclude the week with the Flash US PMIs.