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market analysis
Market focus on Trump Zelensky talks, Euro/USD faces range fluctuations
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Decision Analysis]: The market focuses on Trump Zelensky talks, and the euro/dollar faces range fluctuations." Hope it will be helpful to you! The original content is as follows:
On Monday (August 18), the euro/dollar exchange rate fluctuated and consolidated, trading below 1.1700 during the European period, with cautious market sentiment and lacking major macroeconomic data to promote. Traders remained on the wait-and-see attitude before awaiting the outcome of talks between U.S. President Trump and Ukrainian President Zelensky. According to Reuters, after Trump's talks with Russian President Putin, the two sides reached an agreement on providing security guarantees to Ukraine, but failed to push Ukraine to achieve its goal of joining NATO. In the short term, geopolitical tensions may affect market sentiment.
Brands
Recent Reuters News Reports show that the United States and Russia have reached a preliminary consensus on the Ukraine issue, but the Ukrainian government remains a rejection of Russia's demands, especially on the issue of Crimea's ownership and accession to NATO. Trump will meet with Ukrainian President Zelensky on Monday and proposes that Ukraine needs to make concessions under Russian conditions, including abandoning Crimea and promising not to join NATO. The market generally believes that this series of requirements may not be supported by European countries, causing traders to remain cautious about risky assets.
As risk sentiment dominated, the US dollar (USD) remained strong, while the euro (EUR) performed weakly. U.S. retail sales data released last Friday grew in line with expectations and consumption remained strong, further supporting demand for the dollar.
Technical:
Bollinger Band Analysis
From the technical point of view, the Euro/USD exchange rate continues to oscillate and consolidate between the upper and middle rails of the Bollinger Band. The width of the Bollinger band shows that the current market lacks large fluctuations, and market sentiment is more cautious. It is expected that the exchange rate will continue to fluctuate and consolidate in the short term.
MACD analysis
From the MACD indicators, the exchange rate faces certain pressure in the short term. The MACD line is slightly higher than the signal line, but the bar chart shows signs of gradually shrinking, showing that the market momentum has weakened and a possible pullback. If the MACD bar chart continues to shrink and eventually a dead cross, the EUR/USD may fall below the 1.1455 support level, further testing the support area below.
RSI analysis
RSI (relative strength index) is currently around 53.48, and no overbought or oversold signals are displayed. The market sentiment is relatively neutral, indicating that prices may continue to fluctuate in the short term, and there is no clear upward or downward trend.
Price Action Analysis
The current Euro/USD exchange rate fluctuates between 1.1455 and 1.1829. Although the price shows a volatile trend, it has not broken through the strong resistance level of 1.1829 above in the short term, nor has it broken through the support level of 1.1455 below. Prices are still restricted by the Bollinger bands, suggesting that range fluctuations may be maintained in the short term, waiting for clearer market drivers.
Preview of Market Sentiment
The market sentiment is currently cautious, and traders are waiting for the results of Trump's talks with Zelensky and the speech of European Central Bank President Lagarde on Wednesday. It is expected that if Lagarde's speech is biased towards hawkish, the euro may receive some support, and if Fed Chairman Powell's speech is biased towards hawkish, the strength of the dollar may continue further.
As the euro/dollar continues to fluctuate and consolidate, market focus shifts to the upcoming U.S. economic data and the European Central Bank policy direction, traders may take a wait-and-see attitude in the short term.
Future Outlook
Bules Outlook
If Trump and Zelensky talks alleviate market risk sentiment, it may bring some rebound momentum to the euro/dollar; the euro/dollar may break through the current oscillation range and challenge the upper resistance level of 1.1829 again.
Short Outlook
However, if the geopolitical situation fails to ease and the market remains cautious about risky assets, the EUR/USD may continue to maintain a volatile pattern and may even fall below the support level of 1.1455, further testing the lows around 1.1320.
Conclusion
In the short term, the euro/dollar may continue to fluctuate and consolidate within the range of 1.1455 to 1.1829. Fluctuations in market sentiment, especially the results of Trump’s talks with Zelensky, and the upcoming speeches from the United States and the European Central Bank, will become important factors affecting the exchange rate.
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