EUR Euro – Dollar still under pressure, focus on the outcome of US trade talks

The euro fell against the dollar on Monday as investors worried that Brussels might not be able to reach an agreement with Washington before the deadline, as progress on the agreement was slow despite multiple rounds of negotiations with the EU. Originally scheduled for Wednesday this week, the 90-day suspension of reciprocal tariffs on US President Trump's "Liberation Day" ended; however, US President Trump signed an executive order on Monday to extend the effective date of reciprocal tariffs from July 9 to August 1.

The euro has been rising against the dollar since February, forming an upward trend line on the technical chart, and has formed support at 1.1610 so far. The 25-day average is at 1.1595, which is an important basis for the euro's medium-term trend. The nearer support will first look at 1.1680, and the next level is estimated to be 1.1630. At this stage, the chart still shows that the average line is also arranged downward from short-term to long-term, and the price remains above the short-term average line, which is regarded as a technical signal of medium- and long-term strength. The current resistance is 1.1830, and then the focus will be on the 1.20 mark, which is both a psychological barrier and the 200-month moving average. Since breaking below it in December 2014, the exchange rate has not been able to clearly pull back above this indicator. Therefore, the euro may encounter more significant resistance in this area in the future; however, if it can further break through this area in the future, it may induce a greater upward momentum, and then refer to 1.2250 and the high of 1.2349 in January 2021, and even the high of 1.2555 in February 2018.

Estimated volatility:
Resistance 1.1830 – 1.2000 – 1.2250 – 1.2349 – 1.2555
Support 1.1680 – 1.1630 - 1.1595/1.1610*

News summary
7 / 7
Eurozone retail sales fell 0.7% in May from the previous month and rose 1.8% year-on-year
Eurozone SENTIX investor confidence index rose to 4.5 in July from 0.2 in June
German industrial production rose 1.2% in May from the previous month

Focus:
Tuesday:
Germany's May trade balance (14:00)

Friday:
Germany's June CPI/HICP final value (14:00)
France's June HICP final value (14:45)

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