The EUR/USD currency pair is experiencing downward pressure, trading near 1.1600 during the early American session on Tuesday. Strength in the US Dollar is attributed to easing trade tensions between the United States and China, providing short-term support for the Greenback. This comes at a time when the US government remains shut down, further complicating the economic landscape.
As of now, the EUR/USD is priced at 1.1606. President Donald Trump recently surprised market analysts by adopting a more conciliatory tone towards China. He stated that China has treated the US with “great respect” and expressed optimism that a deal could be reached. Trump is set to meet with Chinese President Xi Jinping next week during an economic conference in South Korea, which could further influence trade dynamics.
Despite the potential for improved relations, the ongoing government shutdown poses a significant challenge. The impasse between Democrats and Republicans continues, leaving thousands of federal workers in limbo and deepening the funding crisis. The Senate’s failure to pass a funding bill on Monday highlights the urgency of the situation.
Technical Analysis of EUR/USD
From a technical perspective, the EUR/USD pair has seen a decline for three consecutive days, indicating a bearish trend. The daily chart reveals that sellers are keeping the price below the 100 Simple Moving Average, which hovers around 1.1650. A bearish 20 Simple Moving Average is positioned slightly above, reinforcing resistance.
The short-term outlook remains negative, as technical indicators indicate a downward movement into oversold territory. The 4-hour chart shows that the EUR/USD is firmly below all moving averages, with the 20 SMA losing upward momentum. Immediate support levels are identified at 1.1590, followed by 1.1540 and 1.1510. Resistance levels are set at 1.1650, 1.1690, and 1.1740.
As market participants await further developments, the technical indicators suggest that bearish sentiment may persist. The lack of relevant macroeconomic data in the current calendar does little to alleviate these concerns, leaving traders to focus on broader geopolitical factors and market sentiment.
In summary, the EUR/USD pair is under pressure as it nears a critical support level of 1.1600. The interplay between the US Dollar’s strength and ongoing political challenges in the United States will likely shape the currency pair’s trajectory in the coming days.