February 19, OctaFX – The euro declined slightly against the USD as investors waited for Donald Trump’s reaction to a report submitted by the Commerce Department.
Investors focus on US-EU trade relations
The report was commissioned to evaluate whether European autos pose a national security threat to the United States. For years, Trump has cautioned against the Europeans, saying that they take advantage of the US. Imposing tariffs on European cars would lead to swift retaliation, which would have major implications in trans-Atlantic relations and trade.
These tariffs would reduce total German car exports by 7.7 per cent, or by €18.4bn,” said Gabriel Felbermayr, head of ifo’s Centre for Foreign Trade, adding that value creation in the German car industry would fall by €7bn, or about 5 per cent. About 60 per cent of the total damage inflicted on the European car industry by such tariffs would be felt by Germany.
EURUSD technical analysis
The EURUSD pair declined to an intraday low of 1.1295 as traders started to worry about trans-Atlantic trade. This price is below the 21-day and 42-day EMAs.
The signal line of the MACD has turned lower while the RSI has declined to the current level of 40. The pair will likely continue to decline today and test the important support of 1.1233.
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