EUR/USD turned bullish at the beginning of this week after the US ISM manufacturing fell deeper in contraction, instead of getting better. Then, Donald Trump’s comments that he might postpone the Phase One deal until presidential elections in China next year gave the USD another kick, sending this pair higher.

EUR/USD pushed above moving averages without much resistance on the H4 chart. Then yesterday we saw another bullish move higher after further comments from Trump that trade talks with China are going well. Bloomberg’s report that the Phase One deal will likely be official by December 15 improved the sentiment further and the Euro jumped higher as a risk currency.

EUR/USD returned back down in the afternoon, but the 200 SMA (purple) turned into support. This moving average has been doing that job before, so it is working as support again now. Earlier today the economic data from the Eurozone was negative once again, with German factory orders declining by 0.4% in November, while Eurozone retail sales contracted by 0.6% in the same month, and October’s was also revised lower from +0.1% to -0.2%.

So, the economy keeps deteriorating in the Eurozone, but EUR/USD didn’t mind that too much. This pair formed a hammer candlestick on the H4 chart, above the 200 SMA which is a bullish reversing signal after the pullback and it climbed higher after that. This shows that buyers are still in control here, although this is more of a result of increased USD weakness this week.