- The EUR/USD opened the week on a positive note, resuming its gains.
- Markets are shrugging off concerns about the trade after the failure of the G-7 Summit.
- The technical picture remains slightly positive, but far from perfect.
The EUR/USD is trading around 1.1800, up on the day. The major development over the weekend was the ending of the G-7 Summit in Quebec without a joint communique. Tensions between the US and the other developed countries were evident from the outset. Trump had a tirade against America’s allies on trade issues, accusing them of unfair practices.
The confrontation between Trump and Canada’s PM Trudeau stood out. After Trudeau said that Canada would not be pushed around, Trump instructed the American team not to sign the statement. Apart Trump called Trudeau weak; his advisors said that his act was one of betrayal while another said there is “special place in hell” for people like the Canadian PM.
Yet the clashes were not only between the North American neighbors. Both Emmanuel Macron of France and Angle Merkel of Germany confronted Trump on trade. The US imposed steel and aluminum tariffs on the EU and also contemplates duties on auto parts.
Markets had reacted on Friday to the tensions with a risk-off sentiment that weighed on stocks and sent the safe-haven Japanese Yen and US Dollar higher. However, the new week begins with more optimism despite the drama over the weekend. Can this last?
The calendar is light on both sides of the Atlantic on Monday, but more important events are due ahead, including decisions from both the Federal Reserve and the European Central Bank. Also, Trump will not stay too far from the headlines as he will meet North Korean Leader Kim Jong-un in Singapore overnight.
More: 5 critical events in 50 hectic hours – everything you need to know
EUR/USD Technical Analysis
The pair is trading above the uptrend support line. On the other hand, the 50-day Simple Moving Average crossed the 200-day one, and this is the “death cross” pattern. The RSI and Momentum are just about balanced. All in all, the picture is mixed, with a slight tendency to the upside.
1.1830 capped the pair on May 22nd and limited the gains also early in the day. Further up, 1.1915 still provides some resistance after working as support back in January. The round number of 1.2000 looms above.
On the downside, 1.1720 was the low point on June 8th and also on May 21st. Further down, 1.1675 was a temporary low on May 23rd. They are then followed by 1.1650 and 1.1600.
More: EUR/USD targets 1.1866 is this upswing succeeds – Confluence Detector