EUR/USD Looking Good In The Uptrend Channel Ahead Of The EC

  • EUR/USD is trading at the upper part of the recent range, amid a better mood.
  • Italy, France, and trade are in the limelight as Brexit takes a break from impacting the Euro.
  • The technical picture has improved, but bears are not too far.

EUR/USD is trading closer to 1.1400 once again, well within the well-known ranges, albeit on higher ground. The world’s most popular currency pair is boosted by a better market mood, stemming mostly from trade talks.

China, Italy, France, and also Brexit

According to reports, China is moving forward with buying US soybeans. Soy trade does not carry a significant economic weight, but farmers form a critical part of US President Donald Trump’s base. Another step forward is related to the China 2025 program, which the Middle Kingdom may modify or postpone according to the Wall Street Journal. The long-term development program, focusing on robotics and Artificial Intelligence (AI) is considered by some to be a threat to US hegemony.

Apart from the upbeat global mood, Italy and the European Commission are also making progress, or at least not clashing. Italian PM Giuseppe Conte met EC President Jean-Claude Juncker, and the sides continue talking amid the EU Summit.

The French budget may also come under scrutiny as President Emmanuel Macron pledged to listen to protests. However, Brussels will likely take a softer approach to the continent’s second-largest economy, especially as the debt-to-GDP ratio is much lower than that of Italy.

In the UK, PM Theresa May won a confidence vote in her Conservative Party. At the moments, markets are cheering the escape from an imminent collapse of the government. However, the no-confidence vote by 117 members, the lack of a majority in Parliament for the Tories, and the refusal of the EU to renegotiate Brexit may all come to haunt the Pound and eventually hurt the Euro. At the moment, the Euro seems to ignore Brexit developments.

In the US, Wednesday’s inflation report for November fully met expectations with Core CPI accelerating at 2.2% YoY. The Fed remains on course to raise rates next week.

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