**EUR/USD, USD/JPY, and AUD/USD Analysis: US Dollar Remains Mixed after Weekend Trade Developments**
*Based on reporting by James Hyerczyk for FXEmpire and supplemented with information from Reuters and Investing.com.*
—
## Overview
The US Dollar exhibited mixed performance at the start of the week as investors continue to assess the impact of new trade tariffs between the United States and China, as well as related comments from policymakers over the weekend. Major currency pairs such as EUR/USD, USD/JPY, and AUD/USD are responding to broader themes including risk sentiment, central bank policies, and the global growth outlook.
This article provides an in-depth forecast for these major currency pairs, considering both technical and fundamental factors that influence trading decisions in the forex markets.
—
## Global Sentiment Shaped by US-China Trade Tensions
### Key Developments
– The American government implemented additional tariffs on Chinese goods effective last Friday, marking an escalation in the ongoing trade war.
– China responded with its own set of tariffs targeting American products.
– Both sides have sent mixed signals regarding the possibility and timing of future negotiations.
– Over the weekend, US President Joe Biden mentioned potential easing of tariffs on selected Chinese consumer goods to curb domestic inflation. However, there were no concrete commitments or schedules for fresh talks.
### Impact on Forex Markets
– Defensive sentiment prevails in currency markets, with traders seeking safe-haven assets such as the Japanese Yen and the US Dollar.
– Commodity-linked and risk-sensitive currencies, like the Australian Dollar, have come under pressure.
– Bond markets have seen renewed volatility, which in turn impacts yield differentials and currency valuations.
—
## EUR/USD Outlook
The Euro fell moderately against the US Dollar, as investors weighed the latest trade tensions and diverging central bank commentary.
### Key Drivers
– **Trade concerns**: Fear of additional economic disruption stemming from protectionist measures.
– **ECB policy**: Comments from European Central Bank (ECB) officials suggest a cautious approach to normalization amid subdued Eurozone inflation.
– **US Federal Reserve stance**: The Federal Reserve continues to indicate openness to further tightening to combat inflation, supporting the Dollar.
### Fundamental Outlook
– Recent Eurozone data has shown mixed results. Core inflation remains below target, constraining ECB’s ability to tighten policy aggressively.
– The US economy demonstrates greater resilience, with better-than-expected job creation and sustained consumer spending.
– The yield differential between US and German government bonds remains favorable for the Dollar.
### Technical Analysis
– Major resistance for EUR/USD is seen at the 1.0920 region. A break above this could open the path toward 1.1000, while failure to reclaim this level suggests further downside risk.
– Initial support sits at the recent low near 1.0800. A decisive daily close below this level may invite additional selling pressure toward 1.0720 and potentially 1.0650.
– Momentum indicators (Relative Strength Index, MACD) remain neutral
Read more on AUD/USD trading.