Trade talks boost EUR/USD

11 Oct 2019

ECB President Draghi’s speech later today may strongly affect currencies. His talk comes at a critical time, with many criticising his QE restart. The EUR/USD is being traded over 1.10 during Friday’s opening. Trade war talks commenced yesterday and helped to boost the pair. 

The EUR/USD currency tops the 50,100 and 200 Simple Moving Averages on the four-hour chart, whereas the Relative Strength Index (RSI) stays under the 70 level. The highest level the pair reached on Thursday was 1.1033. 

Despite moving at a slow pace, the EUR/USD has gone up 250 pips from the lowest points in October. Traders are now feeling optimistic about the ongoing trade war – talks have restarted, and U.S. President Donald Trump is planning to allow American businesses to apply for licenses that would enable them to trade with the Chinese tech company Huawei. This boosted market sentiment. Trump said, “I think [the talks are] going really well. I will say, I think it’s going really well.” The yuan may be weakened so to lead to a higher number of U.S. agricultural food purchases, whilst Washington will not add any new tariffs next week. 

The GBP/USD continued to improve after Thursday’s rally. UK Prime Minister Boris Johnson met with Irish leaders yesterday and noted that they are working on a deal. Moreover, the UK is continuing to try to reach an agreement with the EU in Brussels. The Cable is being traded at 1.2436, following a 15-day high of 1.2469 in the overnight trade. The GBP/USD pair increased by more than 250 pips, closing on the 1.2300 handle. U.S. CPI figures increased market speculations and pressured the USD.