On Tuesday the 19th of May, trading on the euro closed 7 pips up against the dollar at 1.0922. The euro dropped from a high of 1.0976. The growth was snuffed out after hitting fresh lows on the back of European data and a rise in stock indices. Remember that the euro got a boost on the 18th of May following an announcement that France and Germany plan to create a 500bn EUR coronavirus fund that will help to alleviate the devastation caused by the pandemic.
Day’s news (GMT+3):
- 11:00 Eurozone: trade balance (Mar).
- 12:00 Eurozone: CPI (Apr).
- 15:30 Canada: CPI (Apr).
- 17:00 Eurozone: consumer confidence (May).
- 17:30 US: EIA crude oil stocks change (15 May).
- 21:00 US: FOMC minutes.
The U3 line held the bulls up as they were beaten back by it twice. The rate dropped from 1.0976 to 1.0919. At the time of writing, the euro is trading at 1.0941. There are some divergences between the H1, H4, and H8 timeframes. Since the bulls didn’t manage to break above 1.0965 in the Asian session, there’s a risk of returning to 1.0930.
The promising results of COVID-19 vaccine trials have reduced demand for the safe haven assets. The majors are trading up against the dollar, except for the yen. The euro crosses are all trading up. In our forecast, we expect the growth to continue to 1.1004. The target on the U3 line is 1.1030.