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EUR / USD: follow the ZEW institute indices and international trade news

EUR / USD currency pair yesterday showed multidirectional movement, while maintaining a fairly narrow range of trading, amid the absence of important economic news on the market that could give a trend impulse to price.

The main influence on trading yesterday was provided by geopolitical news related to the aggravation of trade contradictions between the USA and China. The parties exchanged threats of increasing import duties for each other, which put pressure on the US currency. But, rather quickly, the dollar was able to restore the positions lost earlier against the background of fairly optimistic statements by members of the FOMC. In particular, the head of the Federal Reserve Bank of Boston Rosengren, said that the US economy is strong enough to withstand a trade war, but in his opinion it is still too early to assess the possible consequences of aggravating trade relations between the US and China, the parties can still conclude a trade agreement that will reduce external risks.

Investors also focus on US-EU trade relations. The Germany Economy Minister said that his country will not participate in speculation about the introduction of American sanctions on European cars, noting that Germany supports the principles of free trade. EU Trade Commissioner S. Malmstrom was sharper in his statements and threatened the United States with an immediate response to the possible introduction of higher tariffs on European imports. Malmström noted that next week he should have a meeting with US Trade Representative R. Laitheiser.

Today, geopolitical news will remain the focus of investors' attention, but in the middle of the day, economic news may have a rather strong influence on trading. In Germany today will be published indexes from the ZEW Institute, and in the EU will be published data on industrial production for March.

On the chart, the currency pair continues to test the upper limit of the medium-term downward price channel. While all attempts to gain a foothold above this inclined line have not been crowned with success, price resistance continues to provide a level of 1.1260. Nevertheless, the initiative is still on the side of buyers, so today we can expect the next retest of 1.1260.

  • Resistance levels: 1.1260, 1.1320, 1.1430.
  • Support levels: 1.1210, 1.1180, 1.1150.

The main scenario is a decline to 1.1210 and a resumption of movement to 1.1260.

An alternative scenario - consolidation above 1.1260 and growth to 1.1320.

The market maintains a neutral news background, which contributes to the further development of range movement between levels 1.1210-1.1260. Therefore, intraday can be considered both longs and shorts of the instrument from the borders above the indicated price channel.

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