**EUR/USD Retreats Below 1.1700 as Trade Tariff Concerns Boost US Dollar (Adapted from FXStreet Article, Original Author: FXStreet Team)**
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The EUR/USD currency pair faced significant downward pressure, breaching the psychological 1.1700 level, as global investors responded to growing trade tensions and broad-based strength in the US dollar. Widespread fears related to US tariffs and their potential economic impact have driven demand for safe-haven assets, particularly the greenback, pushing the dollar index (DXY) to its highest in two weeks.
**Market Overview:**
– The US dollar gained across the board amid resurging trade war anxieties.
– EUR/USD fell below critical technical support at 1.1700, triggering fresh selling.
– The market’s risk-averse tone led to increased flows into the US dollar.
**Background: US-China Trade Concerns**
The escalating trade dispute between the United States and China remains at the forefront of investors’ minds. Recent communication from the White House suggests that President Donald Trump’s administration is prepared to impose tariffs on an additional $200 billion worth of Chinese goods. As Beijing prepares to respond in kind, the stakes continue to rise.
– US administration considering broadening the scope of tariffs.
– Retaliation from China is expected if the US follows through.
– Risks to global trade and economic growth have lifted demand for safe-haven assets.
**US Dollar Strength:**
The US dollar index (DXY), which tracks the greenback’s performance against a basket of six major currencies, surged past the 95.00 mark for the first time in two weeks. The dollar’s advance was driven by:
– Market uncertainty surrounding trade tensions.
– Investors seeking safety in the world’s reserve currency.
– Robust US economic data and expectations for continued rate hikes by the Federal Reserve.
**EUR/USD Pair – Technical Breakdown:**
Following several attempts to reclaim higher ground above 1.1750, EUR/USD encountered stiff resistance and reversed its course. Sellers pushed the pair under the 1.1700 support, extending intra-session lows.
– Previous support at 1.1700 has now turned into resistance.
– Next major support lies near 1.1630, followed by 1.1600.
– Resistance levels are identified at 1.1720 and 1.1750.
**Key Technical Indicators:**
– Moving Averages: The pair trades below its 20-, 50-, and 100-period moving averages on the 4-hour chart, reflecting bearish momentum.
– Relative Strength Index (RSI): The indicator dropped to levels near or below 30, suggesting the pair is potentially oversold but maintaining a negative bias.
– MACD: The signal line remains below zero, confirming bearish market sentiment.
**Major Drivers in Detail:**
**1. US-China Trade War Escalation:**
Markets remain dominated by news relevant to the US-China dispute. The Trump administration’s
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