Softer US Dollar allowed the Euro to break above the psychologically important 1.10 level for the first time in two weeks. The ongoing US-China trade talks weakened the greenback as Trump tweeted that he will meet China’s Vice Premier Liu He on Friday, raising hopes that the two sides could make progress on trade issues. Moreover, expectations of a partial trade deal has been pricing in in the market place following yesterday's report on a potential US-China currency pact. The Single currency will likely challenge 1.1075 today if there is a partial deal, leading to a suspension of the planned US tariff hikes. Trade wars are currently the main market driver in this market over recession fears.
The Single currency bulls took out the psychological resistance level at 1.10, the 200-day moving average and the medium-term bearish trend, tilting the market sentiment to the bulls’ side. The buyers are currently looking to break above 1.1025 to retest 1.1075. The bears, however, need to gather momentum and break back below the 200-day moving average to remain relevant in the short-term.
Support: 1.10 / 1.0965
Resistance: 1.1025 / 1.1075