EUR/USD remains in the red despite trade optimism and Trump's bearish comments on USD

• EUR/USD offered near 50-day MA in Asia, having faced rejection near 61.8% Fib retracement hurdle last week. 
• Trump said a strong dollar hurting US competitiveness. 
• The US-China trade deal may embolden the Fed to hike rates. 

EUR/USD is currently trading at 1.1366, having clocked highs near the 50-day moving average (MA) of 1.1385 in Asia. 

Technically speaking, pair's repeated failure to beat the resistance at 1.1407 (61.8% Fib R of 1.1514/1.1234), as seen last week, could entice sellers. 

Wall Street Journal reported in early Asia that the US and China are closing on a trade deal. The risk assets responded positively to that news with China's Shanghai Composite index rising to the highest level since June 2018. 

So far, however, EUR hasn't picked up a bid and could be offered in Europe despite potential risk-on in equities as any normalization of ties between the US and China will likely pave way for more Fed rate hikes. 

Also, President Donald Trump said that he wants a dollar that's great for the American economy and not a dollar that is so strong that it is prohibitive for us to deal with other nations.

Trump's bearish take on the USD, however, seems to have gone unnoticed, leaving EUR/USD at the mercy of the 10-year yield differential, which is currently seen at 258 basis points - the highest level since Feb. 18. 

The spread could continue to rise in the EUR-negative manner as easing trade tensions may reinvite Fed rate hikes, as noted earlier. 

Technical Levels