US Dollar Roars Back in a Blaze of Glory as Market Shrugs Off Recession Fears
Key factors driving EUR/USD movement
Washington and Beijing have agreed to cut tariffs to 30% and 10%, respectively, for 90 days.
Meanwhile, US Treasury Secretary Scott Bessent confirmed plans to meet with Chinese representatives again in the coming weeks to begin negotiations on a broader trade deal.
The tariff reductions boosted market sentiment towards the dollar, which had previously faced pressure over concerns that President Donald Trump’s trade policies were diminishing the appeal of US assets. However, market nervousness is likely to persist until the White House establishes stable trade terms with all key partners.
Attention now turns to the latest US inflation report, which may show how the new tariff policy affects prices.
Technical analysis: EUR/USD
On the H4 chart, EUR/USD broke below 1.1190, completing the third wave of decline towards 1.1065. Today, we anticipate a corrective wave retesting 1.1190 (from below). Once this correction concludes, a new downward wave towards 1.1040 is expected. This scenario is technically confirmed by the MACD indicator, with its signal line below zero and pointing decisively downward.
On the H1 chart, the market has achieved the local downside target at 1.1065. Today, a potential rebound to 1.1126 is in focus. If this level is breached upwards, a further correction towards 1.1190 may follow. Subsequently, the downward trend could resume, targeting 1.1040. This outlook is supported by the Stochastic oscillator, whose signal line is above 80 but poised to decline towards 20.
Conclusion
The US dollar’s resurgence reflects improved risk sentiment following the US-China tariff truce, though uncertainty lingers over long-term trade relations. Technically, EUR/USD remains under pressure, with further downside likely after a brief correction.
Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
Weekly Analysis: Wall Street Drops as Brent Crude Breaks Above $100, Reviving Inflation Worries
PPI Spike to Guide Tonight’s CPI — Fed Hike Expectation Rises
The ECB’s hawkish stance did little to help the euro, as markets focused on the Fed
US Yields Rise Despite Buybacks; Eyes on ECB Hike
US Treasury Triples Long-Term Bond Buyback Size
The euro is banking on the ECB
EBC Markets Briefing | Euro eyes more gains on mounting dollar debasement risks
