(MENAFN- Daily Forex)

• The British pound initially tried to rally during the session, but we had a Bank of England meeting during the early hours and as predicted, they did cut rates by 25 basis points.
• Nonetheless, I think what is even more important here, at least for the day, is that the United States now has a trade agreement with the United Kingdom.
• You would think that's a low hanging fruit, but that's actually something that hasn't been the case for years, ironically enough.

So now when I look at this chart, I start to focus on the fact that the 1.34 level is a massive ceiling going back quite a while. When you look at the weekly chart, we aren't too far from forming three shooting stars in a row. That's a very negative turn of events.

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So, for me, if we break down below the 1.32 level, I'm going to start shorting. At that point, I would have a stop loss at the 1.34 level. The US dollar has gotten quite a bit of a boost from this trade agreement with Britain and not just against the British pound.

There's also comments coming across the wire that yes, the Chinese will more likely than not see tariffs being scaled back a bit. And with the Chinese and the Americans meeting over the weekend, there's a lot of optimism.

EURUSD Chart by TradingView

If we do in fact get a trade agreement between the United States and China, that will more likely than not boost the US dollar, at least in the short term, because you won't have the need for foreign entities to raise dollars so much that the dollar won't be something that you need to insulate your portfolio with as much. And therefore some of the sold positions against the US dollar will be reversed. So, it'll be interesting to see how the 1.32 level holds up or if it doesn't. Very interesting times, we live in. If we can break above the 1.345 zero level, then maybe we will go higher, but right now that does not look like how we are tilted.

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