The EURUSD pair is extending gains for the fourth day in a row on Tuesday, with the recent buying interest was fuelled by Trump’s verbal interventions. The US President has criticized the Fed for raising interest rates. His rhetoric sent the greenback down across the board, which helped the euro to regain the 1.15 threshold.
As the pair has recovered from lows decently, and the buck remains under pressure against major rivals, the price could proceed with the ongoing rebound in the short term as the single currency still looks attractive for buyers, and the dollar will feel the effect from Trump’s intervention for some time yet. As such, EURUSD could overcome the 20-DMA at 1.1540 and target the 1.16 barrier.
The risk for this scenario is if the US-China trade talks this week fail to result in a breakthrough. In this case, the dollar will regain ground due to safe haven demand. So it’s too early to claim victory for the euro as much will depend on the developments around the trade tensions.
By Helen Rush
Senior Analyst at Capital Markets