EU Creates Its Own Trade Problems

With traders focused on discussion between the US and China in order to resolve the trade war which the US initiated, many tend to forget and ignore the third player on the scene, the EU, and its own trade practices. While efforts are being made to find a solution which will work for the US and China, the EU is creating its own trade problems with both sides. The EU is set to delay the start of trade negotiations with the US which is likely to further anger US President Trump and at the same time the EU is stepping up criticism over China’s human right accord and how it treats European firms.

The struggling EU economy can ill afford a trade dispute with any major trading partner, let alone one with the two biggest on the planet. Why the EU is engaging into this two-front attack remains unclear. EU ambassadors are scheduled to meet tomorrow in Brussels in order to reach a consensus on the start of trade negotiations with the US. France is expected to block the mandate as it stated that the EU should not negotiate with any country which is not a signatory of the Paris Climate Accord. The US pulled out of it and the French are angered, unfortunately the rest of the EU is allowing this to hinder progress.

One of the key exports which is fueling the Eurozone are auto exports, but the sector is already struggling. This is especially true foe the key German car sector and US President Trump has hinted that he may attack this sector after a resolution with China has been reached. A 25% import tax on EU cars has been touted which would add an additional $10,000 in costs to US car buyers. The US Ambassador to the EU, Gordon Sondland, added in February that “so long as the EU leadership plays the delay game the more we will have to use leverage to realign the relationship.” This as further raised the potential for an escalating trade conflict between the US and China.

With the Eurozone economy pressured as a result of the global economic slowdown, how will it handle a confrontation with the US as well as China? The Euro has been sliding, but is now the time to buy or should forex traders sell any potential rallies? Open your PaxForex Trading Account today and build a market beating forex portfolio with the help of our expert analysts.

The French led issues in regards to trade negotiations with the US are risking repercussions from the US at the same time Jean-Claude Juncker, the European Commission President is taking swings at China. He noted that “It can’t stay like this, that Chinese companies have free access to our markets in Europe, but we don’t to the markets in China.” He also pointed out that Chinese investment into the EU is dividing policy by adding that “One country isn’t able to condemn Chinese human rights policy because Chinese investors are involved in one of their ports. It can’t work like this.” It appears that the EU is on a war path of its own as traders are focused in US-China trade discussions. The EU creates it own trade problems, but here are three forex trades in order to profit through any trade related fallout.

Forex Profit Set-Up #1; Buy EURCAD - W1 Time-Frame

While the EU and the Eurozone are struggling with the global economic slowdown, Canada’s resource sector us posing a drag on its economy as well. In addition, Canada is no stranger to trade disputes with the US as well as China. Given the size of the potential support system for each economy, the EURCAD is poised to advance off of its secondary ascending support level. An advance back into its secondary descending resistance level is expected over the nest few weeks and forex traders are recommended to to by any potential dips down to the upper band of its horizontal support area.

The CCI has moved into extreme oversold conditions, but remains off of its lows and is now being met by an ascending support level of its own. A push back above the -100 mark is likely to trigger the next wave of buy orders on top of a short-covering rally in the EURCAD. Follow the PaxForex Daily Fundamental Analysis and allow our expert analysts to guide you to over 500 pips in monthly profits.

Forex Profit Set-Up #2; Buy EURSGD - W1 Time-Frame

The economic worries of the EU have punished its own currency and while the current trade approach of the world’s largest trading bloc leaves no hope for an improvement, there are short-term opportunities in the Euro. The Singapore Dollar remains extremely vulnerable to any economic shock as a result of trade wars which is why the EURSGD is a perfect candidate for a bullish Euro trade. Price action is currently stabilizing inside of its horizontal support area and being approached by its primary descending resistance level. The EURSGD is expected to complete a double breakout and accelerate back into its next horizontal resistance level which has its secondary descending resistance level closing the gap. Spreading buy order inside the horizontal support area is the favored trading approach.

The CCI remains in extreme oversold territory as a positive divergence, a strong bullish trading signal, has formed. This is expected to result in a push above -100 from where price action is likely to take its next trading clue. Download your PaxForex MT4 Trading Platform and join our fast growing community of profitable forex traders!

Forex Profit Set-Up #3; Sell EURAUD - W1 Time-Frame

The Euro has held its ground against the Australian Dollar, but hopes for a positive outcome in the next round of US-China trade discussions is on the rise which will benefit the Australian Dollar at the cost of the Euro. The EURAUD has dropped below its secondary ascending support level and turned it into resistance. In addition, the primary and secondary descending resistance levels are exercising bearish pressures on price action. With no support levels available, this currency pair is expected to contract down into its next horizontal support area. Forex traders are advised to sell any rallies in the EURAUD into its secondary descending resistance level.

The CCI moved into extreme oversold conditions, but well off of its lows. Bearish momentum remains elevated which is likely to push this technical indicator further to the downside and rag price action lower with it. Subscribe to the PaxForex Daily Forex Technical Analysis and profit from the hard work of our expert analysts by copying their trading recommendations!