The EURUSD currency pair reacted with a sharp plunge to recent news about the easing of the US-China trade war on Monday, May 12, with the dollar strengthening significantly against the euro. However, on May 13, following the release of US year-over-year Consumer Price Index (CPI) figures, the pair fully recovered its losses. Today, May 14, quotes are trading at 1.12470, above the strong resistance level of 1.12000. A price pullback from this level appears likely.
The Relative Strength Index (RSI) on the daily timeframe stands at 41, indicating a potential confirmation of the downtrend. The 4-hour RSI continues to favor short positions on the pair.
The Moving Average Convergence Divergence (MACD) indicator on the daily timeframe remains above the zero line but shows significant weakening of bullish momentum and is approaching the baseline. The 4-hour MACD continues to signal downside potential for the asset, though with slightly weakening momentum.
The 50-day exponential moving average is currently at 1.10820 and may serve as a downside target for the currency pair in the near future.
The US and China agreed to mutually reduce tariffs after two days of negotiations in Geneva. The United States cut tariffs on Chinese imports from 145% to 30%, while China reduced its US import duties from 125% to 10%. Optimism that this deal between the world's two largest economies could de-escalate their trade tensions has led traders to scale back recession expectations. This development may provide some dollar support and create headwinds for the major currency pair.
Trading strategy option: sell at current price with Take Profit at 1.10800 and Stop Loss at 1.13000.
This content is for informational purposes only and is not intended to be investing advice.
