- EU PMIs miss targets as macro data weakens across the board.
- Trump, tariffs, and trade wars have become the life cycle of market sentiment.
The EUR/USD is lifting in a fresh round of Dollar-selling, trading into the 1.2340 level ahead of the European market session.
EUR slides on PMI miss
The Euro faltered in Thursday’s action following a round of disappointing Markit PMIs for the Euro region; the Eurozone Composite Markit PMI came in at 55.3, lower than the 56.7 that was forecast and even further than the previous period’s 57.1. The economic downturn that was widely expected in the first quarter of 2018 is hitting a little bit hard than most were anticipating, and the EUR flushed from a session high of 1.2388 following the release. The EUR/USD pair found some traction heading into the end of the New York trading session thanks to a fresh round of bluster and threats from US president Donald Trump gearing up to impose a fresh round of tariffs on Chinese goods and the ever-revolving door of Trump’s White House administration.
Tariffs continue to suck the air out of markets
The rest of Thursday’s trading was clouded over by Donald Trump’s selection of a third national security advisor since taking office in early 2017, and John Bolton, a Bush-era policy hawk who has publicly supported the idea of outright attacking both North Korea and Iran is set to take over for outgoing retired Gen. H.R. McMaster soon.
Trump unveiled a selection of duties and tariffs aimed squarely at China, and Beijing refused to flinch today, lining up their own set of tariffs to counter Trump’s should the brinkmanship finally fall over the steep side, and markets are putting some space between themselves and the US Dollar in early Friday action. European Union leaders are also keeping a close eye on the trade war flare-ups, but have so far remained detached, focusing on finding a peaceful resolution between themselves and the US over Trump’s steel and aluminum tariffs that the Eurozone has so far not been able to secure an exemption from.
It’s a quiet showing on the macro calendar for Friday, and the Euro is set to finish off the trading week being led by the nose through market sentiment as traders chew on the possibility of an all-out trade war between the US and China, and the ensuing spillover into other sections of the international trade framework.
EUR/USD Levels to watch
Action heading into the European markets is being straddled by yesterday’s high and low at 1.2388 and 1.2285 respectively, and a break lower will run into further support from the week’s swing low near 1.2270, while bulls will have to clear March’s high of 1.2445 before claiming fresh ground.