The euro currency is back under strong downside pressure against the US dollar, with the price now trading closer to key weekly support. Should traders expect the EURUSD pair to continue its decline? Gain insight into today's technical analysis.
23 October, OctaFX – In July, Donald Trump met with the President of the European Commission, Jean Claude Juncker. At the time, the US President promised to implement massive tariffs on $200 billion worth of foreign-made cars. This decision would have been very difficult for the EU who threatened to retaliate.
Transatlantic Deal Fades
After the meeting, the two leaders committed to talks to resolve the underlying issues. This week, the euro has continued to decline against the USD as it has become increasingly clear that a deal between the US and the EU will not be straight forward. EU’s Cecilia Malmstrom accused the US of not taking the talks seriously.
In response, US Commerce Secretary, Wilbur Ross, and Gordon Sondland, the US Ambassador to the EU accused her of “complete intransigence”, dragging her feet in the negotiations, and trying to wait out Mr. Trump’s time in office.
The US President is now demanding “quick negotiations that produce tangible results,” as trade teams prepare to meet in Washington.
EURUSD Technical Outlook
On October 9, the EURUSD pair started moving higher after reaching a low of 1.1430. It reached a high of 1.1620 on Wednesday last week and then started moving lower, reaching the previous low of 1.1430 on Friday.
Yesterday, the pair opened at 1.1570 and then fell sharply. Today, these declines continued and the pair reached an intraday low of 1.1453. Therefore, with no major economic data from the EU and the US, the pair will likely continue with the path of least resistance and decline to the 1.1430 level. This is confirmed by the double EMA, MACD, and the Money Flow Index indicators.
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