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Single currency correcting after Friday’s rally

Euro bulls attempted to renew Friday’s high of 1.1209 as the European session opened today. This attack may have been boosted by the EURJPY. The Euro rose against the dollar before a strong IFO report on Germany.

Business sentiment in Germany for June has exceeded expectations. The index climbed from 114.6 to 115.1 (forecast: 114.4). The IFO also upgraded their economic growth forecast for Germany from 1.5% to 1.8% for 2017.

Growth stalled at 1.1208. In the space of an hour, buyers had erased all their gains. The EURUSD pair fell to 1.1176. The Euro’s slide coincided with a fall in gold prices. Gold prices slipped by 17 USD in the space of a minute, hitting 1,236 USD per ounce. Apparently, the reason for this fall was a mistake made by a trader while trading stocks, because after this fall, the price immediately rebounded upwards by 12 dollars.

The single currency came under added pressure from the news in the UK that Theresa May is set to conclude a ‘confidence and supply’ deal with the DUP in order to form a working majority in parliament after several weeks of talks.

The US is set to publish data on durable goods orders today. In addition, ECB president Mario Draghi is set to speak. I’m expecting the Euro to fall against the dollar to 1.1156 by the time trading closes in Europe. The higher the pressure from the EURGBP cross, the lower the price will close at the end of the day.

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