empty
29.05.2025 03:32 AM
EUR/USD Overview – May 29: Laughable or Lamentable? Trump Promises a Deal Again

This image is no longer relevant

The EUR/USD currency pair did not perform as well for the dollar on Wednesday as it did during the previous two days. However, even Monday and Tuesday can hardly be described as strong days for the U.S. dollar. What did we learn on Monday? After a discussion with Ursula von der Leyen, Donald Trump decided to postpone the immediate implementation of the proposed 50% tariff hike. What did we learn on Tuesday? Durable goods orders in the U.S. dropped by 6.3%. Now, let's look at this data objectively. What's positive about it? That the trade conflict between the U.S. and the EU didn't escalate further? That order volume did not fall by 7.8% as expected, but by "only" 6.3%? From our perspective, the reasons for optimism seem quite questionable.

But Donald Trump wasn't done. On Wednesday, he claimed that the European Union requested urgent scheduling of meetings with U.S. representatives to discuss a trade deal. Trump said the parties might agree on a deal before July 9. Sometimes, it feels as though Trump is using NLP techniques, repeating similar statements over and over to mentally steer the public in his direction. There are no signs of active trade talks or updates on progress—neither with the EU nor China. Perhaps negotiations with Brussels will begin soon, but who says they will conclude by July 9 and end with a signed agreement?

It's worth recalling that during Trump's first term, negotiations with China lasted more than a year and a half. The UK negotiated with the EU for several years. On what basis can one expect a U.S.–EU or U.S.–China deal within a few weeks? As usual, there was a lot of talk and very little action. One must remember that, as of now, the U.S. has signed only one trade deal— with the UK. And even at the time of its announcement, the agreement had not yet been signed, and the parties were expected to discuss many details for weeks to come.

Thus, we believe the dollar has already responded to the market's short-term optimism, but no further reasons exist for sustained strengthening. Traders continue to ignore genuinely important factors that could benefit the dollar—if only Trump hadn't started the trade war. For now, however, the market is only focused on developments in the trade conflict. The positive news has been priced in. What's next?

In the near term, we could reasonably expect the dollar's decline to resume—or at least for its rise to stall. Technical indicators must confirm any trading assumption, so long positions should only be considered if the price is above the moving average.

This image is no longer relevant

The average volatility of the EUR/USD pair over the last five trading days as of May 29 is 76 pips, which is classified as "moderate." We expect the pair to move within the range of 1.1221 to 1.1373 on Thursday. The long-term regression channel remains upward-sloping, continuing to indicate an uptrend. The CCI indicator recently entered oversold territory, and a bullish divergence has also formed, signaling the potential for the trend to resume.

Nearest Support Levels:

S1 – 1.1230

S2 – 1.1108

S3 – 1.0986

Nearest Resistance Levels:

R1 – 1.1353

R2 – 1.1475

R3 – 1.1597

Trading Recommendations:

The EUR/USD pair is attempting to resume its upward trend. For months, we've repeatedly said that we expect only a medium-term decline from the euro because the U.S. dollar fundamentally has no reason to fall—apart from Donald Trump's policy decisions, which will likely have devastating effects on the American economy. Nonetheless, the market still shows a complete unwillingness to buy the dollar, even when there are reasons to do so. Short positions remain relevant when the price is below the moving average, with targets at 1.1230 and 1.1108, although a strong dollar rally should not be expected. Above the moving average, long positions should be considered with targets at 1.1475 and 1.1597.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Stanislav Polyanskiy
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD Overview – July 18: Is the Market Tired of the Dollar and Trump?

The GBP/USD currency pair once again leaned toward decline on Thursday. After the British pound strengthened on Wednesday evening following another report about Powell's dismissal, the dollar quickly recovered. However

Paolo Greco 03:56 2025-07-18 UTC+2

EUR/USD Overview – July 18: Trump Will Keep Trying to Fire Powell for Another Year

The EUR/USD currency pair continued its steady decline throughout Thursday. As a reminder, the forex market experienced an "explosion" on Wednesday evening. Donald Trump once again attempted to either fire

Paolo Greco 03:56 2025-07-18 UTC+2

Farce, Absurdity, and a Drama Series

Since Donald Trump continues his attempts to remove Jerome Powell from the position of FOMC Chair, it's worth taking a closer look at this topic. All recent news is well

Chin Zhao 00:26 2025-07-18 UTC+2

The Bearish Trend in USD/CAD Is Nearing Its End

Canada's Consumer Price Index rose in June from 1.7% y/y to 1.9%, while core inflation increased from 2.5% y/y to 2.7%. This growth remains within an acceptable range —

Kuvat Raharjo 00:26 2025-07-18 UTC+2

AUD/USD: Knockout for the Aussie

The Australian dollar fell sharply against the U.S. dollar on Thursday, updating local price lows. The decline is driven not only by the overall strengthening of the greenback but also

Irina Manzenko 00:25 2025-07-18 UTC+2

The Dollar Doesn't Believe in Myths

What if the idea of the Federal Reserve's independence is just a myth? JPMorgan believes exactly that. The firm argues that the central bank has always interacted with the White

Marek Petkovich 00:25 2025-07-18 UTC+2

EUR/JPY. Analysis and Forecast

Today, the EUR/JPY pair is regaining positive momentum after yesterday's pullback from the 173.25 level, which now marks the yearly high, and is maintaining intraday growth. Spot prices are currently

Irina Yanina 19:08 2025-07-17 UTC+2

USD/CAD. Analysis and Forecast

On Thursday, the USD/CAD pair received support from buyers and rose above the key 1.3700 level, driven by the overall strengthening of the US dollar. Spot prices have corrected

Irina Yanina 12:14 2025-07-17 UTC+2

Not Everyone at the Fed Agrees with Powell

Given the current confusion within the Federal Reserve and the mounting pressure on its Chair Jerome Powell, not all policymakers agree that interest rates should remain elevated. Thomas Barkin, President

Jakub Novak 11:43 2025-07-17 UTC+2

The Dollar Was Shaken Yesterday — Here's Why

The U.S. dollar came under heavy selling pressure yesterday following media reports suggesting that Federal Reserve Chair Jerome Powell might be dismissed in the near future. This unexpected development triggered

Jakub Novak 11:38 2025-07-17 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.