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On Wednesday the 4th of April, trading on the euro/dollar pair closed slightly up. Volatility was consistently high throughout the European session. Still, the exchange rates on the majors didn’t differ much from Tuesday’s closing prices.

The trade conflict between the US and China is weighing down on the dollar, while giving a boost to safe haven assets. I found it interesting that as trade relations between these two nations begin to deteriorate, negative news items are only having a short-term effect on markets. China has announced a 25% import tariff 50bn USD’s worth of American products. In response to this news, the euro shot up from 1.2258 to 1.2314, after which the pair consolidated within a range of 1.2270 – 1.2310. Moreover, stock indices have now completely recovered their losses.

Day’s news (GMT+3):

Fig 1. EURUSD hourly chart. Source: TradingView

In yesterday’s trading, the euro hugged the balance line during the second half of the day. In Asia this morning, the dollar is trading up against all the majors. The euro has dropped against it to 1.2262.

I’ve adjusted my forecast by lowering my minimum to 1.2259 at the 45th degree and changing my maximum to 1.2305. Earlier today, all of the euro crosses were trading up. Now, they’re all in the red except for the EURJPY and EURAUD pairs. If we start to see a truncated formation on the hourly timeframe, this could entail a drop to 1.2231.