EUR/USD nearing 1.2345 on weak US Dollar

• China is considering devaluing its currency in order to gain a commercial advantage.
• The EUR/USD is trading close to last week’s high at 1.2345 as bulls take the lead.

The EUR/USD is trading at around 1.2319 up 0.30% as the US-China trade war weighs on the US Dollar. China announced that it was studying options to devalue the yuan in order to gain a competitive advantage. 

Coming next in the New-York Session is the speech by ECB’s Praet, member of the European Central Bank's Executive Board since June 2011. 

Looking ahead the FOMC minutes will be released on Wednesday at 18:00 GMT.   

Earlier, ECB’s President Mario Draghi said that he expects inflation to accelerate and the economic growth to stay strong in the Eurozone, which compounded with US Dollar weakness was rather bullish for the euro. However, as usual, Mr. Draghi made also some cautious comments: “While we remain confident that inflation will converge towards our aim over the medium term, there are still uncertainties about the degree of slack in the economy. A patient, persistent and prudent monetary policy, therefore, remains necessary to ensure that inflation will return to our objective.” 

EUR/USD weekly chart

The EUR/USD is trading within last week’s range. The EUR/USD remains range bound for the 13th consecutive week. Bulls’ objective is to break above 1.2345 last week’s high. The bears will try to push the market down towards 1.2215 last week’s low. 

EUR/USD daily chart

The market is finding resistance at 1.2337 which is the 50-period simple moving average on the daily chart. A break above the level can lead to a move up to 1.2477 swing high. The daily RSI is currently at 50.53 and the MACD indicator is showing slowing bearish momentum. 

EUR/USD 4-hour chart

The 100 and 200-period SMA are capping the price. Supports are at the 1.2260 swing low and the 1.2215 cyclical low. The 1.2345 level (last week’s high) is the next hurdle for bulls. If they can successfully break above the resistance the next ones come at 1.2422 and 1.2477 swing highs. The RSI and the MACD indicators are bullishly configured.