US$ rebounds as trade tensions ease, EURUSD vulnerable

  • Trade tensions have eased over the past 24 hours, with the US stating they would delay the imposition of new tariffs until 15th December and also that trade negotiations would resume shortly.
  • This sent riskier assets higher, with equites rallying and saw a selloff in safe havens, notably the Japanese Yen (USDJPY surging higher) and also setting Gold lower.
  • Furthermore, this development also saw a rebound in the US Dollar against other major currencies, with prospects of a less dovish Federal Reserve.
  • This leaves the short-term outlook for the US Dollar positive and here we focus on the ensuing downside risks for EURUSD.

EURUSD negative tone

A selloff Tuesday but still within the range theme of the past week, but we see a possible topping threat and see risks lower for Wednesday.
The early August push above 1.1188 produced a shift to an intermediate-term range we see defined as 1.1286 to 1.1069.

For Today:

  • We see a downside bias for 1.1161; break here aims for 1.1113.
  • But above 1.1210 opens risk up to 1.1249.

Intermediate-term Range Breakout Parameters: Range seen as 1.1286 to 1.1069.

  • Upside Risks: Above 1.1286 sets an intermediate-term bull trend to aim for 1.1412 and 1.1448.
  • Downside Risks: Below 1.1069 sees an intermediate-term bear trend to target 1.1000, 1.0839 and 1.0578.
4 hour eurusd chart 2019-08-14

4 Hour EURUSD Chart

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