On Tuesday the 14th of May, trading on the euro closed down. The EURUSD pair dropped from 1.1243 to 1.1201. The 45th degree provided some support along with the lower boundary of the upwards channel. I think that we’ll see some sharp fluctuations over the next few days caused by Donald Trump. The US has increased tariffs on Chinese goods. China will introduce countermeasures on the 1stof June. Trump says that trade talks with China are set to continue, and expects that they will conclude successfully. The Chinese government has confirmed that they intend to continue holding trade negotiations.
Day’s news (GMT+3):
- 12:00 Eurozone: GDP (Q1), employment change (Q1).
- 15:30 Canada: BoC CPI core (Apr).
- 15:30 US: retail sales (Apr), NY Empire State manufacturing index (May).
- 17:00 US: NAHB housing market index (May).
- 17:15 Eurozone: ECB’s Cœuré speech.
- 17:30 US: EIA crude oil stocks change (10 May).
- 23:00 US: net long-term TIC flows (Mar).
Expectations that the euro would drop were met. The bears broke the trend line in today’s Asian session. The pair is currently trading at 1.1203.
Preliminary German GDP figures for the first quarter of 2019 showed a rise of 0.4%, as predicted. The year-on-year growth slowed more than expected, posting a rise of 0.6% against a previous reading of 0.9%. Markets declined slightly in response, and this drop has intensified at the time of writing.
In my forecast, I expect the euro to drop to the 67th degree against the dollar at 1.1185. If the euro crosses decline during this drop, the euro should make it to 1.1175. As we approach 1.1185, we should keep an eye on trading volumes on euro futures, as well as on the trajectory of the yen and gold. A rise on yen and gold will indicate an increase in pressure.