The fact that the race in importing US and China import tariffs is not yet automatic, is enough for markets to regain their balance. Wall Street is moving from hell to heaven, which calms the mood on the currency market with the main benefit for USD.First, China's response to US protectionism has brought a deterioration in moods and increased risk aversion, but in the following hours, the market has focused more attention on the fact that both the US and China have not indicated the specific date of application of the proposed import duties and both sides are open to negotiate . Later it was confirmed by the economic advisor of the White House Larry Kudlow, according to which the tariffs announced by the US for goods from China are just a proposal that may never come into force. Therefore, on the positive side, the global investors hope that the actual restrictions in trade may be on a much smaller scale than those announced, and their consequences will be small (0.1-0.2 percentage points of the US GDP). On the negative side, we have many months of uncertainty about what the negotiations will end, because regardless of the declarations, they remain a gate to the escalation of the crisis.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market remains in a tight range between the levels of 1.2282 - 1.2238 after a rally towards the technical resistance at the level of 1.2388 has failed. The momentum oscillator is still below its fifty level, so the bias is still negative despite the oversold market conditions. In case the technical support at the level of 1.2238 is violated, the next support is seen at the level of 1.2163.
