Yesterday, the European currency have tried several times to get out on new monthly highs paired with the US dollar after the worsening of the US-China trade conflict. However, the buyers of risky assets could not do this.
Let me remind you that the administration of the US President announced new duties of 10% on imports from China worth $ 200 billion. New duties in the US will come into force on September 24 and by the end of the year will be raised to 25%.
China's response
It is expected, but the response from the Chinese authorities did not take long, and by the end of the day, an official statement from China was published.
It states that "the Celestial Empire" introduces new duties on the import of goods from the United States in the amount of $ 60 billion in response to duties from the United States. China's new tariffs apply to 5,200 goods from the US, including agricultural products, machinery and equipment, and chemical products.
The new duties will begin to operate on the same day as the American ones, on September 24. Their size will be from 5% to 10%, but China has promised to raise the rate if the US raises its duties in January.
On Tuesday evening, US President Donald Trump issued a statement saying that if China takes measures against US farmers, the White House administration will consider the issue of imposing additional duties on the import of goods worth $ 257 billion.
A number of experts also note the fact that the Chinese authorities can resort to more authentic moves, without introducing new fees and increasing tariffs. The point is that China can take measures that directly affect services, as well as investments from the US, and these measures are aimed precisely at the sphere where the US has a positive balance with China.
Fundamental data
Yesterday's sales reports in US retail chains did not affect the US dollar rate.
According to The Retail Economist and Goldman Sachs, the US retail sales index for the week of 9 to 15 September fell by 0.8% compared to last week. Compared to the same period in 2017, the sales index grew by 3.4%.
According to Redbook, retail sales in the US for the first two weeks of September this year rose by 0.3%, compared to the same period in 2017, sales increased by 5.9%.
The confidence index in the US construction sector remained at a high level in September.
According to the National Association of Housing Builders NAHB, the housing market index in September 2018 was 67 points, remaining unchanged from August. Economists had expected the index in September to be 66 points.
Technical picture EUR / USD
As for the prospects for the growth of risky assets, today much will depend on the intermediate level of resistance 1.1689, which sellers will try to retain in the morning, which will only lead to an aggravation of the situation in the European currency. The best level for euro sales today will be resistance 1.1705-1.1710, as a move beyond it will lead to the demolition of a number of stop orders of large sellers and the formation of a major upward trend with the renewal of the highs of 1.1760 and 1.1800.
The targets for short positions in EUR /USD for today will be the lows of 1.1650 and 1.1620.
