EUR/USD: The pair is bouncing sharply due to the escalation of the trade war

© O Financista.

The pair EUR/USD continues its rally this Monday morning, with a summit on 1.1150, accentuating a movement started last Thursday on a support at 1.1025.

After diving last Wednesday in the face of the meeting of the Fed’s less dovish than expected, which had boosted the Dollar, the EUR/USD had begun to bounce back, and ends this morning to cancel the losses displayed in the face of the Fed meeting, with the help of the sharp aggravation of the trade war China-USA.

The escalation of the trade war-inflates expectations of a rate cut from the Fed

Last Thursday, the US president, Donald Trump has indeed surprised the world in announcing the new tariffs against China, as negotiators US returned just from a trip to Beijing.

After the meeting of the Fed’s less dovish-than-expected last Wednesday, in which Jerome Powell had suggested that the rate cut that was announced will remain isolated, climbing unexpectedly the trade war came to re-inflate the expectations of investors in terms of rate reduction by the Fed.

It should also be noted that climbing is accentuated over the weekend, with a prompt response from China, which has devalued its currency, and asked the State enterprises to stop their purchases of agricultural products US.

In this context, it’s a safe bet that Trump will return to the charge on Monday, maintaining this favorable climate to the expectations of a rate cut from the Fed, and we will monitor its Twitter (NYSE:TWTR) very closely over the next few hours.

Technical update EUR/USD

From a graphical point of view, the pair EUR/USD has sent several bullish signals since last week, with a return above the psychological threshold of 1.11 and above the moving average 100 hours last Friday, while this morning, the pair went above the moving average 200 hours.

The summit of the day at 1.1150 will be the next resistance to be overcome, before the area 1.1190-1.12.

Has the decline in the moving average 100 hours to 1.1107 and the psychological threshold of 1.11 form a first support, before 1.1050, 1.1025, and 1.10.

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