EUR/USD is on the up and up, trading at 1.0630 and heading towards the “flash surge” highs. 1.0650 is the next cap, a level that was reached during the holidays, thanks to low liquidity.

The reason for the current upswing is much more substantial. The US dollar is down on a disappointment from Donald Trump’s press conference. The President-Elect, due to enter the White House in 8 days, has not been presidential, to say the least.

Trump was quite brash with treating the media, behaving as if he was still on the campaign trail and did not convince anybody by transferring the management of the company to his sons. But the message for markets was more significant.

Financial markets were inspired by his campaign promises to build roads and bridges, infrastructure investment that could give the US economy a shot in the arm. However, in the press conference, there was no mention of that. Even tax cuts, which are the easier path for his fellow Republicans to stimulate the economy, did not receive a mention.

The economic message that did emerge from the gathering was related to trade: he promised to bully more companies to keep manufacturing in America. This style of trade war talk is worrying. The optimism of markets also stems from hope that slapping new tariffs was only campaign talk.

The end result was a big fall in the US dollar, albeit from high levels.

EUR/USD dropped sharply ahead of the event, sliding all the way to 1.0450, below the 1.0460 resistance line. From there, it quickly bounced above 1.05, and the trend continued.

Above 1.0650, we find further resistance at 1.0710 and 1.0820. 1.0520 is weak support, followed by 1.0460 and strong support at the 14-year trough of 1.0340.