EUR/USD ticks higher amid gold's rally to 7 year high

Gold's rally to multi-year highs is likely weighing over the US dollar and pushing the EUR/USD higher on Monday. German minister calls for a temporary ban on Chinese takeovers.  Escalation of the US-China or EU-China tensions could cap the upside in the spot.

EUR/USD drops to 1.0815 during the early Monday trading session. In doing so, the quote stays depressed below 200-HMA while also staying inside a short-term triangle formation. Although the pair’s immediate failures to cross 200-HMA drags it towards 1.0800 mark, the formation support, at 1.0775 now, will keep the sellers in check. Should there be a clear break below 1.0775, April month bottom surrounding 1.0730/25 will be the bears’ favorite.

On the contrary, an upside break of 200-HMA level of 1.0823 will push the pair towards a three-day-old resistance line, at 1.0840 now. Though, the pair’s further rise past-1.0840 will be hindered by the said triangle’s resistance line near 1.0860.

Looking ahead, the upside in EUR/USD could stall if China objects to the German minister's appeal to the European Union to block Chinese takeovers of companies. 

"We have to see that Chinese companies, partly with the support of state funds, are increasingly trying to buy up European companies that are cheap to acquire or that got into economic difficulties due to the coronavirus crisis," said Manfred Weber, a senior German conservative and head of the center-right EPP grouping in the EU Parliament, according to Reuters. 

Moreover, the US-China trade tensions are already on the rise and could weigh on risk assets. On the data front, German Bundesbank's Monthly Report is scheduled for release on Monday. Across the pond, the focus will be on the NHB Housing Market Index (May).