EUR/USD Signal Today 07/04: Points To More Gains (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1100.
• Add a stop-loss at 1.0850.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.0850.
• Add a stop-loss at 1.1100.

The EUR/USD exchange rate surged to a multi-month high of 1.1143 as market participants came to terms with the ongoing trade war between the US and the European Union. The pair then pulled back to the current 0965 and European Union trade war

The EUR/USD pair retreated as investors focused on the trade war between the US and the European Union. In a statement last week, Trump noted that the US would levy a 20% tariff on most goods from the bloc to the US. Other goods like steel, aluminum, and cars will attract a 25% tariff.

These tariffs will affect the biggest bilateral trade relationship that handles almost a trillion dollars a year. While the EU has vowed to retaliate, officials have expressed willingness to negotiate. They have also prepared a package to offer the US to end these tariffs.

A full-blown trade war between the US and Europe will have damaging implications on both sides because of the volume of trade.

The EUR/USD pair also pulled back after Jerome Powell hinted that the Fed would be patient when determining when to cut interest rates. He warned that the bank was now staring at a difficult scenario of stagflation, which is characterized by high unemployment rate and inflation, and slow economic growth.

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The next key EUR/USD news to watch will come from the US, where Trump may come under pressure and relent on his tariffs. Such a move would likely end the ongoing risk-off sentiment in the market.

The pair will also react to the upcoming Federal Reserve minutes, which will provide more information about the state of the economy and what to expect from these officials. The US will next release its inflation data on Thursday/USD technical analysis

The EUR/USD exchange rate peaked at 1.1143 on Thursday and then pulled back after Powell noted that the bank will be patient on rate cuts. It was trading at 1.0965, a few points above the key support level at 1.0937, its highest level on November 6 and March 18. This level was the upper side of the inverse cup and handle pattern.

EURUSD Chart by TradingView

The pair has remained above the 50-day and 100-day moving averages. Therefore, after retesting the upper side of the cup and handle, there is a likelihood that it will resume the uptrend, and possibly retest the key resistance at 1.1145.

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