EUR/USD – Euro slips as trade war worsens

EUR/USD has posted considerable losses in the Tuesday session. Currently, the pair is trading at 1.1552, down 0.60% on the day. On the release front, the ECB Forum kicks off with a speech from ECB President Mario Draghi. In the eurozone, the current account surplus narrowed for a third straight month, dropping to EUR 28.4 billion. This fell short of the estimate of EUR 30.3 billion. In the U.S, the focus is on construction data. Building Permits is expected to remain pegged at 1.35 million for a third straight month. We’ll also get a look at Housing Starts, which is forecast to rise to 1.31 million. On Wednesday, Mario Draghi and Fed Chair Jerome Powell will participate in a panel at the European Forum. Germany releases PPI and the US publishes Housing Starts.

The euro is under strong pressure, EUR/USD is struggling to stay above the 1.15 level. The pair has declined 1.3% in the month of June. Investors are reacting negatively to the escalating trade war between China and the U.S, and if the tit-for-tat tariffs continue, the euro could continue to head south. The U.S announced a 25 percent tariff on $50 billion in Chinese goods on Friday. After China responded with an identical move on U.S. imports, President Trump has now threatened to impose 10 percent tariffs on some $200 billion in Chinese goods. Not surprisingly, China has threatened to retaliate to this latest move. Trump has vowed to take action on the $375 billion trade deficit that the U.S has with China, claiming that the latter is guilty of unfair trade practices. With the first of the U.S tariffs scheduled to take effect on July 6 and no signs that any side will blink first, the markets should be preparing for stormy weather ahead.

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EUR/USD Fundamentals

Tuesday (June 19)

  • 4:00 ECB President Mario Draghi Speaks
  • 4:00 Eurozone Current Account. Estimate 30.3B. Actual 28.4B
  • 8:30 US Building Permits. Estimate 1.35M
  • 8:30 US Housing Starts. Estimate 1.31M

Wednesday (June 20)

  • 2:00 German PPI. Estimate 0.4%
  • 8:30 US Current Account. Estimate -129B
  • 9:30 ECB President Draghi Speaks
  • 9:30 Fed Chair Powell Speaks
  • 10:00 US Existing Home Sales. Estimate 5.55M

*All release times are DST

*Key events are in bold

 

EUR/USD for Tuesday, June 19, 2018

EUR/USD for June 19 at 6:05 DST

Open: 1.1622 High: 1.1644 Low: 1.1531 Close: 1.1555

 

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1312 1.1434 1.1553 1.1637 1.1728 1.1829

EUR/USD was flat in the Asian session and has posted strong losses in European trade

  • 1.1553 was tested earlier and is a weak line. It could break during the Tuesday session
  • 1.1637 is the next resistance line

Further levels in both directions:

  • Below: 1.1553, 1.1448, 1.1312 and 1.1190
  • Above: 1.1637, 1.1728 and 1.1829
  • Current range: 1.1553 to 1.1637

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