The trade war between China and the United States, in the light of its next escalation, prompts investors to once again seek refuge in safe assets. The confrontation of the main economies of the world takes a new turn, after early this morning, the Deputy Minister of Foreign Affairs of China called the American sanctions and duties against China as economic chauvinism and psychological terror. In the Forex market, one should expect increased volatility in the main trading pairs.

The next round of talks between Beijing and Washington has recently ended with nothing on the background of another increase in US duties on Chinese goods. US President Donald Trump also ordered to begin the process of raising tariffs for the remaining Chinese imports. In response, the Chinese side said that Beijing, from June 1 will impose increased duties on the importation of American goods in the amount of 60 billion dollars.

Meanwhile, the demand for safer assets, such as US, Germany, and Japan’s government bonds, is gaining momentum. Additional nervousness of traders is caused by continuing disagreements around the budget issue between Italy and the European Commission, which puts pressure on the single European currency.

In the EURUSD pair, the euro continues to be under pressure, dropping below the level of 1.1160. The movement of the pair within the current trend seems to be finding its lower limit at 1.1000 at the moment. Nevertheless, budgetary disputes and another surge in growth on safe assets can create much more significant pressure. The fall of the pair below the level of 1.1000 may well increase the sale of euro.

At the time of this writing, the EURUSD pair is trading at 1.1136 with recommendations for active selling.

Forex trading recommendations:

EURUSD: Sell. Entry point – 1, 1132. Take Profit – 1, 1120. Stop Loss – 1, 1145.

USDCHF: Sell. Entry point – 1, 0079. Take Profit – 1, 0066. Stop Loss – 1, 0101.

USDCAD: Buy. Entry point – 1, 3509. Take Profit – 1, 3524. Stop Loss – 1, 3483.

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