EUR / USD correction risks increase, 1.2310 - first significant support

Yesterday ECB President Mario Draghi and US President Donald Trump comments were the main drivers of volatility in the market. Draghi with his optimistic forecasts regarding the EU economy growth and the achievement on the inflation level target, along with soft comments on the issue of a strong euro exchange rate, contributed to the further growth of the EUR / USD currency pair. Thursday session EUR/USD managed to overcome the level of 1.25. However, subsequent comments by Donald Trump that Stephen Mnuchin's words about the weak dollar were misinterpreted did not allow the currency to gain a foothold above this mark.

Nobody expected that the pair could immediately consolidate at this level, so that events develop according to general expectations. Correction was certainly expected, but the whole question now is only how long the correction will last and at what level the market will stop.

Yesterday, Draghi's speech gave a green light in the continuation of the bullish trend in the market. Today, the currency pair has already recovered and again tried to approach the 1.25 mark, but further success in overcoming this level will depend on US internal statistics. In particular, data on US GDP and durable goods orders can have a key influence on the behavior of market participants. If both the first and second indicators are worse than the forecast, the currency pair is likely to continue its growth and will likely be able to gain a foothold above 1.25 thus opening up new horizons for growth.

A good potential for the growth remains in terms of technical analysis. The currency pair was able to quickly recover after resent losses and again tests for resistance at 1.2475. If in the next few days we see a breakdown of this level from the bottom to the top, we can observe the pair at the level of 1.2570, and maybe we will see the attempt of testing 1.2600. If the breakdown of 1.2475 does not take place, we should expect a moderate decline to the area of ​​1.2300.

Our recommendations: go long when the pair pulls back. The main support level in the zone 1.2310-1.2290