Talking Points:
- GBP/USD[1] remains in its two-month descending channel as UK PM May looks to weather the recent resignations from her cabinet.
- EUR/USD[2] triangle since mid-May has failed to yield a break to the topside, giving the DXY[3] Index room to recover.
- Sentiment for the US Dollar[4] continues to suggest a neutral outlook after recent price developments.
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The US Dollar (via the DXY Index) is advancing for the second consecutive day as traders continue to watch the dust settle after the US-China trade war took a leap forward over the weekend with the imposition of long-threatened tariffs. And while a trade war may not be beneficial for the US Dollar long-term[6], in the near-term, market participants are likely waiting to see if 'this is it' in terms of escalating tensions, or if there's more still to come.
Accordingly, with traders approaching the US Dollar in a wait-and-see mode, other currencies have been given breathing room to exert their own influences on the market. The weakest German ZEW Survey readings since 2012 has kneecapped EUR/USD, which is declining for the first time in four sessions.
The surprise miss comes after several weeks of Eurozone data outperforming: the Citi Economic Surprise Index for the Eurozone, which was at a near-seven year when it was -100.1 on June 8, rebounded to -36.1 by the end of last week. As such, EUR/USD's triangle since mid-May has failed to yield a break to the topside.
In fact, with the
