empty
20.05.2025 07:35 PM
EUR/USD: Weak Dollar Meets Indecisive Euro

The EUR/USD pair has consolidated above the 1.1200 level, reflecting the overall weakening of the U.S. dollar. The "bearish attack" we witnessed last week ended in failure. EUR/USD sellers were unable to hold ground within either the 1.10 or 1.11 ranges. The main reason is the lack of any encouraging news regarding progress in U.S.-China or U.S.-EU trade negotiations. The information vacuum around U.S.-China talks and discouraging leaks about the difficult discussions between Washington and Brussels are raising concerns among traders. Once again, the market is talking about the prospects of a U.S. recession—despite a trade truce, the reduced tariffs still apply and are negatively impacting the American economy.

According to JPMorgan economists, the probability of a recession "remains elevated, although below 50%." Analysts at Bank of America estimate the likelihood at 35%, noting that "this is still a fairly high risk."

Clearly, the longer the reciprocal tariffs with China remain in place (even in their current limited form), the greater the risk of a slowdown in the U.S. economy amid rising inflation.

This image is no longer relevant

Last weekend's "Geneva meeting," during which high-level U.S. and Chinese officials "agreed to keep negotiating," yielded no real progress apart from a temporary reduction in tariffs. Moreover, yesterday a spokesperson for China's Ministry of Commerce publicly criticized the U.S., stating that Washington is "violating agreements reached during the Geneva trade negotiations." The comment referred to an official warning from the White House that any use of Huawei's artificial intelligence anywhere in the world "violates U.S. export regulations."

Such sharp exchanges suggest the two sides are still far from reaching a deal—it is clear the negotiation process (which hasn't truly begun yet) will be very difficult and likely lengthy (for reference, the first trade war talks lasted about 18 months).

Other significant negotiations—namely between the U.S. and the European Union—have also stalled. Here too, rhetoric is becoming more aggressive, both directly and via media leaks. According to Bloomberg sources, if a deal is not reached by July, the White House plans to raise tariffs to 20% (from the current "preferential" 10%).

Meanwhile, European officials are issuing fairly uncompromising messages, essentially saying that the EU will not "capitulate" in a trade war by accepting maximalist or even loosely "compromised" U.S. terms. For instance, Sweden's Minister for Foreign Trade, Johan Forssell, stated that Brussels will not accept the terms previously offered to the UK (10% tariffs on all goods plus sectoral duties) as a compromise. Additionally, EU Trade Commissioner Maros Sefcovic said the EU will also reject U.S. demands related to VAT and digital regulation.

According to an EU official cited by the Financial Times, the deal between Washington and London cannot be a "template" for Brussels, and if the U.S. insists on its demands, the negotiations will likely collapse. In that case, the EU would implement previously approved countermeasures—tariffs on thousands of American goods (aircraft, cars, auto parts, chemicals, electronics, medical equipment, machinery, wine, and even fish), totaling €95 billion. It's also worth noting that last month, the EU approved 25% tariffs on $21 billion worth of U.S. imports (including wheat, corn, clothing, and motorcycles). These tariffs have been suspended during a 90-day grace period, which ends in July.

In other words, the July deadline is getting closer by the day, yet there are no signs of progress in either the U.S.-China or U.S.-EU talks. On the contrary, the latest news and leaks suggest that trade agreements are still far off. This backdrop continues to weigh on the greenback: today, the U.S. Dollar Index again tested the 99 level, marking a second consecutive day of decline.

Adding fuel to the fire, Moody's downgraded the U.S. credit rating from AAA to AA1—for the first time since 1917. Additionally, Moody's Ratings downgraded the long-term deposit ratings of major U.S. banks, including Bank of America, JPMorgan Chase, and Wells Fargo.

Nevertheless, despite this fundamentally bearish environment for the greenback, EUR/USD buyers have little to boast about. The pair gained over 200 points this week and is now holding within the 1.12 range, but it has not been able to break through the 1.1280 resistance level (the upper Bollinger Band on the H4 chart and the middle Bollinger Band on the daily chart). Long positions become more justified once EUR/USD buyers manage to overcome this barrier, opening the path toward the 1.13 range. The next bullish target, assuming 1.1280 is broken, is the 1.1350 resistance level, which corresponds to the Kijun-sen line on the D1 timeframe.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

La guerra entre Irán e Israel todavía no ejerce una influencia negativa significativa en los mercados (existe la posibilidad de una caída limitada en el precio del oro y de un aumento en el #USDX)

Tal como se esperaba, el regulador estadounidense dejó sin cambios todos los parámetros clave de la política monetaria, remitiéndose al mismo factor de incertidumbre respecto a las perspectivas futuras

Pati Gani 11:40 2025-06-19 UTC+2

Análisis del par GBP/USD. El 18 de junio. ¡La Casa Blanca celebra! Se firmó el primer acuerdo.

El par de divisas GBP/USD durante el martes continuó negociándose de forma bastante contenida, pero permaneciendo cerca de sus valores máximos en tres años. Así es como se ha negociado

Paolo Greco 08:08 2025-06-18 UTC+2

Análisis del par EUR/USD. El 18 de junio. ¿Corregirá la Fed la situación para el dólar?

El par de divisas EUR/USD se movió a la baja durante el martes. Hemos dicho muchas veces que para nuevas y sucesivas caídas de la divisa estadounidense no se necesitan

Paolo Greco 08:08 2025-06-18 UTC+2

Análisis del par GBP/USD. El 16 de junio. Cómo Trump hunde al dólar.

El par de divisas GBP/USD durante la nueva semana volverá a estar bajo el dominio de la geopolítica y la política. En principio, llevamos ya 4 meses diciendo lo mismo

Paolo Greco 07:11 2025-06-16 UTC+2

Análisis del par EUR/USD. El 16 de junio. El conflicto entre Israel e Irán no cambiará nada.

El par de divisas EUR/USD durante el viernes fluctuó de un lado a otro. Durante dos días seguidos el par EUR/USD se negoció con una volatilidad elevada, lo que tiene

Paolo Greco 07:11 2025-06-16 UTC+2

La Reserva Federal tiene razón, todavía es pronto para bajar las tasas (espero una caída del #SPX y un aumento del precio del oro)

Los recientes datos del índice de precios al consumidor en EE.UU. publicados el miércoles, a pesar de situarse por debajo del consenso, constatan la persistencia de las presiones inflacionarias

Pati Gani 12:11 2025-06-12 UTC+2

Análisis del par GBP/USD. El 11 de junio. ¿Qué impacto tendrá la inflación?

El par de divisas GBP/USD experimentó el martes una fuerte caída durante la primera mitad del día, pero recuperó su posición inicial durante la segunda mitad. Los operadores podrían haber

Paolo Greco 07:54 2025-06-11 UTC+2

Análisis del par EUR/USD. El11 de junio. Ni siquiera las noticias sobre negociaciones ayudan al dólar.

El par EUR/USD continuó moviéndose de forma débil durante el martes, pero manteniendo una inclinación alcista. El trasfondo macroeconómico ha estado ausente durante dos días consecutivos, aunque han surgido algunos

Paolo Greco 07:54 2025-06-11 UTC+2

Análisis del par GBP/USD. El 10 de junio. Un nuevo juicio para Trump.

El par de divisas el par GBP/USD no mostró ningún movimiento interesante el lunes. Sin embargo, al observar lo que está ocurriendo en Estados Unidos, nos resulta extremadamente difícil imaginar

Paolo Greco 08:06 2025-06-10 UTC+2

Análisis del par EUR/USD. El 10 de junio. Disturbios, protestas, revueltas.

El par de divisas EUR/USD se movió con mucha lentitud durante el lunes. Y fue en vano, ya que el contexto noticioso se vuelve más interesante cada día. Esta

Paolo Greco 08:06 2025-06-10 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.