The EUR / USD pair finished trading on Tuesday with a result of -0.35%, amid a stronger dollar across the entire spectrum of the market.
The US currency was supported by good statistics on new home sales. According to the report in March, sales amounted to 692 thousand, which is the maximum value of this indicator since December 2007. Good economic statistics significantly reduce investor concerns about the prospects of the American economy, which supports the national currency.
In Europe, we see a different situation, as the economic indicators of key countries in the region and the EU as a whole continue to decline, putting pressure on the euro. Investors are very worried about the situation in Germany and Italy. In April, the forecasts for the growth rates of GDP of these countries were revised downwards. On the eve, the head of the Eurogroup Mario Centeno called the economy of Italy the main problem of the entire region, since economic growth in the country remains very weak and the level of public debt is quite high.
In Germany, the focus today will be on data from the IFO Institute on business climate indices and business expectations, as well as an assessment of the current state of the economy. Stronger data can provide strong local support for the EUR / USD pair, since today there are no more important reports in the economic calendar. Conversely, weaker actual figures could trigger a new wave of sales of the European currency.
On the chart, having encountered serious resistance at 1.1260, the currency pair resumed its downward movement and reached the previously noted target at 1.1193. This is a very strong level of support, for which the price has already shown a good response, which makes it more likely that the scenario with the development of a rolling back movement in the area of 1.1240 and more likely to 1.1260 will be worked out today.
The main scenario is a correction to 1.1240 and 1.1260.
Alternative scenario - breakdown of support at 1.1193 and decline to 1.1150.
Today, the market will focus on economic statistics from Germany, which will determine the future vector of price movement. On the chart there are prerequisites for the formation of a corrective movement, but possible longs should be considered near the level of 1.1200 and only after the release of economic statistics.
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