Traders continue to keep an eye on US-China trade talks
Buyers are in near-term control after recovering from the overnight drop to climb back above the key hourly moving averages. However, once again as we have seen since last week, they are lacking the drive to push price higher beyond resistance around 1.1210-20.
And there’s good reason for it. With US-China trade talks set to take place tomorrow, markets will be eyeing the event as a potential make or break for risk sentiment/haven flows this week. Hence, buyers are not “safe” to run away with a bullish mood just yet.
The latest report by Reuters here pretty much confirms what we presumed before this, that is negotiations leading up to a supposed deal this week look to be excluding key components such as IP theft and a currency pact.
I highly doubt China will offer such concessions – at least legally binding ones – come tomorrow, so in that regard, I would view risks to the outcome of trade talks this week as being tilted to the downside. But who knows? Perhaps we could get a surprising turn of events.
In any case, EUR/USD traders will still be closely watching that as it continues to sit in a range between 1.1140 to 1.1220 since last week with price hovering near the 1.1200 handle for the most part. Key downside levels to watch out for today are the 100-hour MA (red line) and 200-hour MA (blue line) @ 1.1188 and 1.1189 respectively now.
Meanwhile, any topside extension will be met by resistance around 1.1210-20 as noted above before further resistance is seen around 1.1230 and then last week’s high of 1.1265.