EUR/USD: Donald Trump Giveth, And Donald Trump Taketh Away

• EUR/USD is clinging onto the 1.1200 level once again after a quick roundtrip. 
• US-Sino trade tensions and Italy's tough stance on its budget weigh.
• The technical outlook is mixed for the currency pair.

Donald Trump giveth, and Donald Trump taketh away. The US President sent EUR/USD higher on Wednesday by postponing potential tariffs on the automotive industry. Germany, which returned to growth in the first quarter, has another reason to smile. 

However, he declared a national emergency related to technology from adversaries, or in other words, a move against Huawei, the Chinese telecommunications giant. The move is another aggravation in the trade war, and the downbeat mood has sent EUR/USD back down.

The common currency is also suffering from its issues. Italian interior minister Matteo Salvini, which is the de-facto PM, refused to raise the VAT, a measure agreed with the European Commission. The recent clash may be part of his campaigning ahead of the European Parliament elections, but investors are selling off Italian bonds and running to the safety of German ones.

The spread between the yields has reached its highest in three months, and the negative German 10-year yield is also wreaking havoc on the euro.

Looking forward, the economic calendar is relatively light. The euro-zone trade balance is followed by US housing figures and the Philly Fed Manufacturing Index. Wednesday's more substantial retail sales release from the US fell short of expectations but did not trigger high volatility. The trade story remains the main market mover.

EUR/USD Technical Analysis

EUR/USD is still suffering from negative momentum on the four-hour chart but has managed to recover the 200 Simple Moving Average it had temporarily lost. It is struggling with the 50 SMA and trades below the 200 one. The Relative Strength Index (RSI) is not showing any trend.

Support awaits at the round number of 1.1200, which provided some support earlier in the day. 1.1180 was Wednesday's low, and May's trough at 1.1135 follows it. The 2019 bottom of 1.1110 is next.

Resistance awaits at 1.1225 that was the peak on Wednesday, and it also coincides with the 100 SMA. Next up we find 1.1250 that held EUR/USD down earlier this month, and finally, the triple-top of 1.1265 towers above. 

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