EURUSD remains under pressure after failed attempts to break above the immediate resistance in the form of the 200-DMA around 1.1140. As such, the pair remains stuck within a bearish channel, with risks pointing to the downside in the near term despite dollar demand is fairly muted at this stage.
Ahead of signing the first phase trade deal between the US and China, investors express a cautious approach due to lack of details of the agreement. Also, market participants realize that even after today’s ceremony, the two sides will still have to go through a long way to resolve the long-standing and deep conflict. Besides, the White House hinted that the existing tariffs on Chinese imports will remain in force until the US Presidential elections. Against this backdrop, demand for riskier assets looks weak, which in turn caps euro demand.
From the technical point of view, unless the pair breaks above the mentioned moving average, the risk of a decline below 1.11 persists. The key support is still represented by the 100-daily moving average at 1.1060. even after the recent recovery from local lows around 1.1085, the euro looks weak due to a lack of positive drivers at this stage.