EUR/USD about to challenge 1.18 as US session backs the greenback

EUR/USD is retreating from a daily high of 1.1842, holding above the 1.1800 level. The pair is at risk of falling further as optimism tends to back the greenback during US hours, according to FXStreet’s Chief Analyst Valeria Bednarik.

Key quotes

“Optimism rules, as the US and China, said they are making progress in trade talks, despite other tensions between Beijing and Washington. The Chinese Ministry of Commerce mentioned ‘a constructive dialogue’ meant to continue pushing forward the trade deal. The positive sentiment is clearly reflected by government debt yields, sharply up, although equities are struggling to extend gains.”

“EUR/USD has made no progress over the last 24 hours, retaining a neutral-to-bearish stance. The 4-hour chart shows that the pair is trading around converging 20 and 100 SMAs, while technical indicators remain within negative levels, with modest downward slopes.”  

“Overall, the risk is skewed to the downside, mainly considering that the dollar tends to appreciate during the American session.”