Due to the strengthening US currency in response to a decline in the yield of the US Treasury bonds we can talk about a bear trap for the EUR/USD
The exchange of pleasantries by the US and China has calmed the financial markets and allowed investors to concentrate on the issue of divergence in monetary policy. As the publication of the minutes of the May meeting of the Federal Reserve approached, it allowed the EUR/USD bears to repulse the opponents' attack on the resistance near 1,182 and return the quotations of the pair to the middle of the 17th figure. In response to a temporary suspension of import duties in the amount of $150 billion, the Celestial Empire undertakes to buy more American oil, natural gas and agricultural products. Beijing starting July 1 will reduce tariffs on imported cars from 25% to 15%. This, of course, is not 2.5%, as required by Washington, but it's a start.
The first round of the trade war was won by China. Using its status as a strategic partner of the United States in relations with North Korea, as well as a low political pain threshold in the US states focused on the export of agricultural products, Beijing made minimal concessions. The example of natural liquefied gas is illustratory. China is to become the largest importer and will increase purchases in any case, but the US are one of the three largest exporters. Why do not they agree? With regard to most of the goods included in the agreement, China can simply redirect purchases from other countries to the US, which will almost go unnoticed by its foreign trade.
De-escalation of the conflict is a played-off factor, and all the more interesting is the strengthening of the dollar against the backdrop of a fall in the yield of 10-year US Treasury bonds and a decrease in the probability of four monetary restrictions by the Federal Reserve in 2018 to 49%. Moreover, there are problems with the attraction of resources for the tax reform. Despite the maximum rate since July 2008 and the expansion of the yield differential of the US and German bonds to 3.17%, the highest since 1990, the proportion of non-residents who purchased these securities at the last auction fell to 39.3% (lowest since 2016 ).
Dynamics of the rate and the share of non-residents 
Source: Bloomberg.
Investors are holding their breath while looking at the minutes of the last FOMC meeting, expecting to see the details of the symmetric nature of the movement of inflation and the debate over the yield curve. The latter indicator is often used as a harbinger of a recession, and its fall to the lowest level since 2007 exacerbates the downside movement risks.
Dynamics of the yield curve
Source: Bloomberg.
At the same time, the Fed is unlikely to decide to get everything in order and say more than the transparency policy requires. As a result, the minutes may seem "pigeon" to the market, which will be the reason for a counterattack of the EUR/USD bulls. It is possible that the strengthening of the greenback on the threshold of an important event against the backdrop of conflicting signals from bond yields is nothing more than an attempt by major players to consolidate long-term gains on the US dollar at a more favorable rate. Moreover, the market may explode earlier. For example, against the background of the release of the business activity data of the euro area. At the same time, one can speak about correction only in the case of a repeated and, this time, successful test of the resistance at 1,182.
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