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·       The euro slipped on Monday as the dollar gained ahead of proposed trade talks between the United States and China this week that investors hope will ease tensions between the world’s two biggest economies.

Anticipated talks between Chinese and U.S. officials in Washington will take place in the next few days, according to media reports. Analysts say those attending will be lower-level officials, although hopes are high that the talks could yield a breakthrough in the months-long trade conflict.

Escalating trade tensions between the United States and its trading partners, in addition to a plunge in the Turkish lira, have boosted the dollar and taken a heavy toll on emerging market currencies.

The euro fell 0.2 percent to $1.1421 EUR= but was still above 2018 lows of $1.3010 hit last week. The euro slid to a 13-month low early last week amid concerns that the Turkish crisis could hurt European banks.

The dollar index rose 0.2 percent to 96.248 .DXY. Traders are also preparing for the release of Federal Reserve policy meeting minutes later this week and the Jackson Hole symposium for insights into the likely direction of U.S. monetary policy.

“Market participants will be eager to hear more details on the interpretation of the Fed’s most recent comment that further gradual rate hikes were appropriate ‘for now’. What does ‘for now’ mean and might it imply a possible change in forward guidance?” MUFG analysts said.

·       The yuan strengthened for a third day in a row, rising to its highest in just over a week, as the People’s Bank of China raised its daily reference rate on the back of a weakening dollar.

The Chinese currency rose 0.55 percent to 6.8485 per dollar, its strongest since Aug. 10, as of 11:36 a.m. in Shanghai. The PBOC strengthened its fixing, which restricts the yuan’s moves by 2 percent on either side, by the most since Aug. 2. It was stronger than the average forecast of traders and analysts for an eighth day.

The yuan’s recent advance has trimmed its slump since mid-June to around 6.5 percent, amid speculation that policy makers sought to limit outflows and as offshore liquidity tightened. The moves come as China plans to send a delegation to the U.S. later this month, stoking hopes of a revival of trade negotiations that stalled in June.

·       EUR/USD Technical Analysis: Looking to Sell into Euro Upswing

The Euro may recover further against the US Dollar having found support at the 1.13 figure before the dominant long-term down trend is resumed. The appearance of positive RSI divergence preceded a bounce as expected and a completed Head and Shoulders pattern on the four-hour chart suggests a retest above the 1.15threshold is in the cards ahead.

Turning to the daily chart, the broader bearish bias seems readily apparent, with price action since mid-April defined by a series of lower highs and lows. A daily close above the 38.2% Fibonacci expansion at 1.1452 opens the door for a retest of support-turned-resistance in the 1.1527-77 area. Alternatively, a push below the 50%level at 1.1329 paves the way for a challenge of the 61.8% Fib at 1.1206.

·       The U.S. and China are meeting later this week in Washington to try to find some common ground in their escalating trade war, but don't expect a "grand bargain," according to an international trade scholar.

Markets are closely watching the bilateral trade talks aimed at resolving an escalating tariff war that threatens to engulf all trade between the world's two largest economies. But, according to Alex Capri, a visiting senior fellow at the National University of Singapore's business school, China and the U.S. face substantial differences of opinion — especially on issues that define China's "economic nationalism."

·       Chinese and U.S. negotiators are reportedly working on a plan to hold talks to end a trade dispute that would result in meetings between President Donald Trump and Chinese leader Xi Jinping at a summit in November, according to Dow Jones.

A nine-member delegation from Beijing, led by Vice Commerce Minister Wang Shouwen, will hold meetings with U.S. officials led by the Treasury undersecretary, David Malpass, on Aug. 22 and Aug. 23, the report said, citing officials from both countries.

·       The Chinese yuan's weakness will be a focal point during the U.S.-China trade talks in late August, as both countries grapple with the fallout from recent fluctuations in the currency markets, analysts said.

The mid-level talks will likely be about "how exactly are they going to deal with the RMB (renminbi)," said Robin Brooks, chief economist at the Institute of International Finance, referring to another name for the yuan.

·       Business economists are sounding some sour notes about Trump administration policies, from trade to immigration to the budget, while expecting the short-term boost to growth from Republican tax cuts to lessen over time.

The National Association for Business Economics survey showed 91 percent of respondents said current tariffs and threats of more to come were having “unfavorable consequential impacts” on the U.S. economy, according to a report released Monday. About two-thirds saw negative effects if the U.S. withdraws from the North American Free Trade Agreement with Mexico and Canada.

·       National Security Advisor John Bolton said on Sunday that the U.S. government is not just worried about Russian interference in the 2018 midterm elections, but efforts from China, Iran and North Korea as well.

Bolton refused to offer specific examples of current or prior Chinese interference. But he insisted that Russia was just one of a group being monitored by U.S. officials. "I'm telling you, looking at the 2018 election, those are the four countries we're most concerned about."

Bolton's comments come just one day after President Donald Trump suggested on Twitter that those investigating Russia's role in U.S. politics should broaden their scrutiny to Beijing as well.

·       China's Premier Li Keqiang said on Monday his government is willing to promote bilateral ties and economic cooperation with Malaysia as Prime Minister Mahathir Mohamad visited Beijing to discuss trade and investment.

The agreements reached on Mahathir's trip showed the two countries would remain friendly in the long term, Li told a joint news conference at Beijing's Great Hall of the People.

·       Oil prices fell on Monday as concerns over slowing economic growth dragged on markets.

Brent crude futures, which act as a benchmark for international oil prices, were at $71.60 per barrel at 0531 GMT, down 23 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were down 22 cents, or 0.3 percent, at $65.69 per barrel.

·       CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices continue to mark time above support in the 63.96-64.26 area. A daily close below this barrier initially exposes 61.84. Alternatively, a turn back above trend line support-turned-resistance at 68.57 opens the door for another challenge of the 69.89-70.41 zone.

Reference: Reuters, DailyFX, Bloomberg