EUR/USD: The fall will accentuate the face of the new truce commercial China-USA

© Reuters.

As might be expected, the positive outcome of the meeting between the US president Trump and chinese president Xi last Saturday in Japan on the occasion of the G20 summit is benefiting the Dollar on Monday, weighing on the EUR/USD pair.

Recall that the two leaders agreed on a new truce that marks the beginning of a new cycle of negotiations, after the failure of the previous cycle at the beginning of the month of may.

The possibility of a final agreement between the two largest economies in the world remains uncertain, but the outcome of the G20 can be avoided in the short term the threat of a new escalation of tensions and tariffs.

Thus, the probability of seeing the Fed cut its rates next month, decreased slightly, since one of the major risks which weigh on the economy comes to be temporarily rejected.

However, a decrease in the rate of the Fed at the next meeting of the 31 July remains the base case scenario anticipated by traders, as we can see with the barometer of the Fed funds rate

From a graphical point of view, the weakness of the Euro since the re-opening of the forex has had consequences. The pair EUR/USD has broken under the support of 1.1350, below its moving average 200 hours, leaving nothing more than the psychological threshold of 1.13 before we can consider that a bearish reversal for a sustainable profile.

The increase, 1.1350 and the area around 1.14 are the first major barriers to monitoring.

Finally, it should be emphasized that the economic calendar of the day will be especially busy, with the manufacturing PMI in Europe and the United States, the unemployment rate in the Euro Zone and the ISM manufacturing index US.

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