EURUSD:
Economic data from Europe and the US remains sparse this week, with investor sentiment entirely dependent on new US President Donald Trump’s trade war rhetoric, which has been tweeted from one moment to the next.
During the current trading week, Donald Trump has been wavering on his campaign promises to impose uniform tariffs on all US trading partners on the day he takes office. He has brushed off his own statements and switched to threats of new tariffs on Mexico, Canada and China ranging from 10% to 25%, which could be imposed as early as 1 February within 48 hours. President Trump’s fury over alleged trade violations led to Europe falling off his list of retaliation tariffs, leaving the Euro bogged down near familiar technical levels.
The euro’s rising interest rate differential against the US dollar has left the euro in a technically weak position, while a steady stream of mixed messages from the European Central Bank’s (ECB) parade of speakers has dampened investor interest in further policy makers’ talking points. ECB President Christine Lagarde is due to make another public statement on Wednesday, but nothing noteworthy is likely to follow.
Friday will see the release of fresh Purchasing Managers’ Index (PMI) data for both the EU and the US. Both indicators are expected to be mixed.
Trade recommendation: Watch the level of 1.0380, when fixing below consider Sell positions, when rebounding consider Buy positions.
Origin: FreshForex
