While everyone is waiting for the end of the U.S. government shutdown, President Donald Trump stated yesterday that he would at some point lower tariff rates on Indian goods, noting that the United States is fairly close to reaching a trade deal with New Delhi.

"They don't like me right now, but they'll love us again," Trump said. "We're getting a fair deal." Later, Trump predicted that the countries are "quite close" to an agreement that would be beneficial for everyone.

However, this optimistic tone contrasts with recent reports that trade talks between the U.S. and India have stalled due to disagreements over market access and agricultural products. Despite Trump's statements, the timeline and details of a possible deal remain unclear. It is evident that reducing tariff rates could be an attempt to ease trade tensions and stimulate further negotiations, though the success of this strategy will depend on both sides' willingness to compromise. Indian officials have so far declined to comment on Trump's remarks, awaiting official confirmation of the information.

These comments are the latest signal of a possible softening of the trade dispute that has strained relations between Washington and New Delhi.

Earlier this year, Trump imposed additional tariffs on Indian exports to the United States, partly to pressure New Delhi to stop purchasing Russian oil, raising tariffs on many Indian goods to as much as 50%. This further heightened tensions in the already contentious negotiations over what the U.S. calls India's high tariffs and other barriers to American goods.

Although Prime Minister Narendra Modi has promised to reduce purchases of Russian oil and expressed optimism about the trade talks, little concrete progress has been made so far. While imports of Russian oil have decreased, it remains unclear whether this will satisfy Trump. After Trump imposed sanctions last month on two of Russia's largest crude oil producers, Indian refineries — which had been buying discounted Russian oil for the past three years — began cutting back purchases from Moscow.

Following that, Indian and U.S. trade delegations met several times, and officials in New Delhi expressed cautious optimism that a deal with the U.S. may soon be reached.

Currency markets have barely reacted to all this news.

Technical Outlook

EUR/USD:

Currently, buyers need to reclaim the 1.1570 level. Only then can they aim for a test of 1.1590. From there, the pair could rise toward 1.1610, though achieving this without the support of major players may be quite difficult. The ultimate target is the 1.1636 high. In the event of a decline, I expect major buyers to become active near 1.1545. If no one steps in there, it would be prudent to wait for a renewal of the 1.1520 low or to open long positions from 1.1490.

GBP/USD:

Buyers of the pound need to break through the nearest resistance at 1.3180. Only this will allow them to target 1.3215, above which a breakout will be quite difficult. The final target is around 1.3245. In case of a drop, bears will attempt to regain control near 1.3140. If successful, a breakout of this range will deal a serious blow to the bulls' positions and push GBP/USD down to the 1.3095 low, with potential to reach 1.3056.