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USD Remains Strong

RoboForex Ltd

Right now, the key trigger for the major currency pair, apart from other important things, is the trade agreement between the USA and China. Well, a possible agreement at least, because there the parties haven’t concluded the real one yet.

Washington planned to introduce additional import taxes against China, but the US President Donald Trump decided to take a break. It is known that the negotiations continued last weekend and both the USA and China describe them as effective.

However, while policymakers are trying to find a perfect version of trade relations, market players are analyzing the report published by the Institute of International Finance, IIF. The document says that losses incurred by the American market due to increased import duties on Chinese goods are much higher than similar losses incurred by the Chinese market due to the US sanctions. It includes declines in both export and import and other significant indicators. This situation seems to be very unusual, because at first everyone believed that China was the damaged party in this conflict.

The trade agreement draft should be ready by the end of this month, when the US President Donald Trump is scheduled to have a meeting with the General Secretary of the Communist Party of China XI Jinping. Nuances of the agreement will probably appear after the meeting.

As one can see in the H4 chart, the divergence on MACD made EURUSD complete the correction to the upside and then break the support line of the ascending channel. Right now, the price is falling and testing the support line of a new channel. The closest downside target is at 1.1326 (50.0% Fibo). After that, the instrument is expected to continue falling towards the projected support level at 1.1278.

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Disclaimer
Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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