Following yesterday’s significant price movement of over 1500 pips, the EURUSD currency pair has left an unclosed price gap, with the minimum target for quotes returning to the level of 1.1185. This level is noteworthy because EURUSD quotes approached it twice last week before rebounding both times.
From a fundamental perspective, a return to this level is supported by ongoing uncertainty surrounding US trade policy. While the American administration recently retreated from its previously announced tighter framework, numerous issues remain unresolved.
Existing US tariffs on Chinese imports continue to overlap with previous tariffs. Even before Donald Trump took office in January, China was burdened with 25% tariffs on many manufactured goods imposed during his first term.
The agreement maintains these tariffs, as well as 100% tariffs on electric vehicles and 50% tariffs on solar panels implemented during the presidency of Joe Biden. Monday’s agreement also excludes “de minimis” exemptions for low-value e-commerce shipments from China and Hong Kong, which were previously revoked by the Trump administration on May 2nd.
Currently, the global market is focused on the 10% minimum charge for trading with the US, a factor that financial markets are likely to react negatively to, potentially leading to further declines. Consequently, the downward trend of the US dollar is not yet complete, and a EURUSD correction upwards towards 1.1185 is highly probable in the near term.
The overall recommendation is to buy EURUSD.
Profits should be taken at the level of 1.1185. A Stop loss could be set at the level of 1.1050.
The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.
This content is for informational purposes only and is not intended to be investing advice.
