EUR/USD is observing a quiet start as we approach European trading
- The US Treasury is proposing tariffs on EU products
- More on the US threats of further tariffs on the EU
The single currency is holding up well despite the fact that the US is looking to kick start the tariffs war with Europe as per the headlines above. Perhaps the news is hitting in a time with thin liquidity but perhaps there are also other reasons keeping the pair stable for the time being. That said, if this were auto tariffs, I reckon the euro would’ve seen much more reaction than what it is experiencing now.
Technically, EUR/USD sentiment remains silently optimistic following the rise yesterday above the key hourly moving averages. That means the near-term bias in the pair is now more bullish though there is some resistance around 1.1273 and the 38.2 retracement level @ 1.1285 to contend with in the session ahead.
Those aren’t the only key levels at play though. The pair also has a field of large expiries rolling off today between 1.1215 and 1.1275 as highlighted here. And that’s potentially one of the reasons keeping the pair in a stable mood as we approach European trading.
Of note, the 1.1275 level also has large expiries (€1.1 billion) sitting there tomorrow in conjunction with the ECB meeting. Just something to take note of.
Given little on the economic calendar to shake things up and with markets still searching for fresh direction on the week, I reckon the large expiries and the focus on the ECB meeting tomorrow could well keep the pair around 1.1230-70 levels today.
However, as mentioned above, near-term sentiment continues to pave the way for a move higher but I’d only start to feel a little more bullish in the pair if we do break above the 1.1300 handle. But even so, there’s the 100-day moving average at 1.1352 that looks very likely to stop any topside breakout for the time being.