slips after Trump’s tariff threat of 30%. rises amid a weak & after Chinese trade data.
EUR/USD Slips After Trump’s Tariff Threat of 30%
- Trump threatens 30% tariffs on EU goods
- data is due this week
- EUR/USD falls to a 3-week low
EUR/USD is edging lower, extending losses from last week. The pair has fallen to its lowest level in almost 3 weeks after President Trump threatened a 30% tariff against the EU. The tariffs will come into effect on August 1st unless a trade deal is agreed.
The EU has said it will delay retaliatory tariffs in order to give more time to reach a trade deal. This is widely seen as a negotiation tactic rather than a final trade tariff. However, uncertainty and the likelihood of higher tariffs is rising, which is weighing on the euro and European indices.
Meanwhile, the is rising modestly, continuing its recovery from a 3.5-year low despite Trump’s latest tariff announcements. As well as informing the EU of a 30% tariff. Mexico was also hit with the same levy that will begin on August 1ST.
The dollar has recovered to a two-week high after booking its strongest weekly performance in four months last week. The risk off mood today is boosting demand for USD as it reverts back to a safe haven asset.
On the data front, attention will be on US inflation and retail sales numbers later this week. US inflation is expected to rise, but not to a level that would cause alarm at the . The FOMC minutes from last week showed that most Fed policymakers still expect two rate cuts this year, with the first most likely in September.
EUR/USD Forecast – Technical Analysis
EUR/USD ran into resistance at 1.1830 and has eased lower, testing the lower band of the rising channel and the 20 SMA. The RSI is pointing lower as momentum slows.
Despite the ease back, the uptrend remains intact for now, with no concrete signs of a reversal. Buyers will look to rise above 1.18 to extend gains towards 1.1830
Sellers will look to break below the support 1.1685. A break below here opens the door to 1.16. Should sellers take out this level, the near-term uptrend is negated, bringing 1.15 into focus.
FTSE 100 Rises Amid a Weak GBP & After Chinese Trade Data
- FTSE outperforms as GBP falls to a 3-week low
- Chinese exports rise 5.8%, lifting mining stocks
- FTSE looks towards 9000
The FTSE 100 informs its European peers, benefiting from sterling weakness, and after Trump threatens the EU with 30% tariffs over the weekend.
The Footsie is up 0.2% after hitting record highs last week, whilst the domestically focused 5250 trades 0.1% lower.
GBP/USD trades at a three-week low after the Bank of England governor, Andrew Bailey, warned that interest rate cuts could accelerate if the job market slows.
Data this week will provide more insight into the health of the UK labour market and UK inflation. With CPI data expected on Wednesday and UK labour market statistics to be released on Thursday.
Meanwhile, the Footsie index is being boosted by 3% gain in AstraZeneca (NASDAQ:), which is rallying after strong trial results for its experimental hypertension drug Bexdrostat.
UK mining stocks are also gaining after Chinese exports beat forecasts in June, lifting sentiment for commodity stocks including Glencore (OTC:), Rio Tinto (NYSE:), and Anglo American (JO:), which are trading around 1% higher.
Chinese exports rose 5.8% year on year in June, beating expectations. U.S. companies used the tariff truce with the US to ship goods ahead of the August deadline of a more comprehensive deal. The data comes ahead of tomorrow’s Chinese Q to GDP figures, which may prompt policymakers to add stimulus to the weak domestic economy.
FTSE 100 Forecast – Technical Analysis
On the 4-hour chart, the FTSE 100 broke out of its rising channel, reaching a peak of 8990 last week, before easing lower. The price found support on the 20 SMA and has rebounded higher.
Buyers will look to rise above 8990 to 9000 round number and fresh record highs.
Support can be seen at 8910-20 zone. Below here 8850 comes into focus. A taking out of this level creates a lower low.
