Summary of EUR/USD Trade Tensions Article
The article discusses the impact of President Trump's proposed 30% tariff on EU imports, which has intensified pressure on the euro and created volatility in the EUR/USD currency pair. The threat of tariffs is set to take effect on August 1, and the European Union has prepared retaliatory tariffs amounting to €21 billion ($24.52 billion). Italy's Foreign Minister, Antonio Tajani, has indicated that further tariffs could follow if negotiations do not yield results. Despite these tensions, the EU has temporarily suspended countermeasures until early August.
Tajani has also called for the European Central Bank (ECB) to consider reviving quantitative easing and lowering interest rates, reflecting concerns over economic weakness in the eurozone. German Chancellor Friedrich Merz has pledged to collaborate with France and the European Commission to resolve the trade conflict. The EUR/USD pair remains volatile as markets evaluate the potential for a trade deal before the August deadline, with any escalation likely to further weaken the euro, especially if the ECB signals a need for more easing in response to trade-related shocks.
Trade Uncertainty and US-China Relations
The article highlights the volatility in the USD/CNH pair due to ongoing trade tensions between the US and China. China's exports rose by 5.8% year-on-year in June, surpassing forecasts, while imports rebounded slightly. The trade surplus increased significantly, indicating a rush by businesses to capitalize on a fragile truce between Washington and Beijing. However, uncertainty remains high due to Trump's global trade policies, including a proposed 40% tariff on transshipments through Vietnam and a potential 10% charge on imports from BRICS nations.
Technical Analysis of EUR/USD
The article provides a technical analysis of the EUR/USD pair, noting a bullish breakout above the key resistance level of 1.12. This breakout has pushed the pair into a higher trend, with a target near the 1.22 level. The formation of a cup pattern and a crossover of the 50-day and 200-day simple moving averages (SMA) indicate strong bullish momentum. Support is identified around the 1.15 zone, where the current correction may find a base before resuming the upward trend.
Outlook for USD/CNH
The article concludes with an analysis of the USD/CNH pair, which has shown strong volatility amid the trade crisis. The pair has faced resistance at the 7.35 level and has entered a correction phase. However, the broader trend remains bullish, with potential for a rebound towards the 7.30 level and a breakout above 7.3660 that could lead to higher levels.