USD feeds on trade tensions

The USD strengthened against a number of currencies while remained stable against others yesterday. As per analysts, the USD is supported by trade tensions as the US economy seems to be in a better position to handle protectionism. However question-marks arise if US economy growth starts to slow down because of tariffs or due to a fading effect of past tax cuts. Media reports state that there is still a lot of uncertainty about tariffs and how bad it can get, however the issue may have started to lose steam. Should there be further headlines on tariffs we could see volatility rising.

EUR/USD remained relatively stable yesterday between the 1.1580 resistance line and the 1.1510 support line. Some bearish tendencies occurred as Germany’s industrial orders growth rate for June dropped more than expected but corrected later on and continued its sideways movement. Technically it should be noted that the pair has clearly broken the downward trend- line incepted since the peak of the 31st of July. Hence, we lift our bearish bias for a sideways movement. Should the pair’s direction be possessed by the bulls we could see the pair breaking the 1.1580 resistance line and aim for the 1.1640 resistance hurdle, while should the bears dictate the pairs’ direction we could see it breaking the 1.1510 support line and aim for the 1.1445 support barrier.