EUR/USD Clings to $1.1306 as ECB Rate Cuts Loom—Trump Trade War Threat Looms Larger

Euro traders white-knuckle the $1.1306 level—because nothing says ’stable currency’ like betting on central bank desperation and political tantrums.

ECB doves circle: Markets price in rate cuts as Eurozone growth stutters, while Trump’s latest tariff threats hang over the pair like a bad derivative trade.

Pro tip: If your forex strategy relies on guessing which octogenarian will blink first, maybe just buy Bitcoin instead.

Trump’s Trade Talk Fuels Dollar Uncertainty

On the US front, President Donald Trump said Thursday that trade talks with China were active – comments quickly denied by Beijing. A spokesperson from China’s commerce ministry said no talks had taken place and asked the US to withdraw unilateral tariffs.

This keeps the dollar on edge, especially as we await the University of Michigan’s revised Consumer Sentiment and Inflation Expectations reports later today.

Matt Weller, head of market research at StoneX, summed it up: “There’s a chasm as wide as the Pacific between the US and China’s trade narratives – and until that closes, dollar rallies will be short-lived.”

With dovish expectations from the Fed and ongoing IMF meetings, the current risk environment is favorable for choppy, range-bound trading in major FX pairs like EUR/USD.

Technical Setup: Bounce or Breakdown

Technically, EUR/USD is consolidating at $1.1331, just above a key ascending trendline support at $1.1306. The 50-period EMA ($1.1387) is capping upside, while the MACD has flattened – indicating market indecision.

For newbies to this pair, it’s a textbook “bounce-or-break” scenario:

Trade Setup Highlights:

• Buy Entry: Bounce from $1.1306 with a confirmed bullish candle

• Sell Entry: Break below $1.1306 with volume

• Upside Targets: $1.1387 and $1.1442

• Downside: $1.1262 and $1.1214

• SL: Below $1.1262 for longs

Wait for price to do the work.