The EUR/USD is falling from the highs near 1.1600 achieved yesterday. One of the reasons for the slide is the threat that US President Donald Trump made in a rally overnight. He wants to slap a 25% tariff on every European car. This tough stance contradicts the move by Commerce Secretary Wilbur Ross to postpone a report about car tariffs.
In addition, the US Dollar is paring its losses ahead of the release of the FOMC Meeting Minutes. The protocols from the latest meeting will likely be hawkish, in line with the statement and the state of the US economy. Trump wants lower rates but the Fed will likely fiercely defend its independence.
Late on Tuesday, Trump’s troubles weighed on the greenback. His former personal lawyer and “fixer” Michael Cohen pleaded guilty to a few charges and testified that he paid hush money to one of Trump’s lovers on behalf of Trump and in order to influence the campaign. In addition, former campaign manager Paul Manafort was convicted for tax fraud and faces another trial. He may also turn against the President. The US Dollar temporarily dipped on this political uncertainty.
In addition, watch out for US Existing Home Sales released at 14:00. The common currency awaits the ECB Meeting Minutes on Thursday.
EUR/USD Technical Analysis
The EUR/USD continues enjoying upside Momentum but has not fully exited the oversold territory. The Relative Strength Index on the four-hour chart is at 70, the border of the oversold ground. The RSI was already on higher ground.
The pair was rejected at the 200 Simple Moving Average (orange line on the chart) at 1.1600 at the time. The recent highs of 1.1582 also serve as near-term resistance. Further above, 1.1625 capped the EUR/USD earlier in the month. 1.1665 is a significant level higher up.