Monday, 29 January 2018

EUR / USD - a new week begins with a correction

Posted by Anonymous at 16:21 Labels: , ,

The week ended was very successful for the European currency. Euro tested level 1.25. The green light on the continuation of the bullish trend was received from Mario Draghi during a press conference after the meeting of the European regulator. At the same time, USD dollar remains under pressure, although the new week begins with a correctional pullback of the dollar, a number of negative factors persist and a generally favorable fundamental background for the European currency remains.
So on Thursday ECB kept the interest rate unchanged and the amount of the asset repurchase program at the same level, Draghi positively estimated the dynamics of economic growth, which is confirmed by economic statistics. Moreover, most importantly, Mario positively assessed the prospects of achieving the target level of inflation in the region, paying little attention to the recent European currency rally.
From fundamental point of view, the dollar remains under pressure amid a number of factors, the main of which is uncertainty. What is interesting the source of uncertainty is the White House. Markets do not know what to expect from the dollar in 2018 amid contradictory statements by representatives of the White House, and the opposite comments of two dignitaries last week do not add to the market any certainty in this regard. In addition, US Federal Reserve's position is not entirely clear. That is why the forthcoming meeting, which will be the last one for Yellen, does not have high hopes for any changes especially since Janet Yellen will not be expected to speak. She left all the room for maneuver to her receiver. Markets take this as an obvious confirmation that no practical steps will be taken at this meeting.
Disappointing data on US GDP, although were ignored by the stock markets, yet for the currency market this information is more significant. Actual data came in at 2.6% with a forecast of 3.0%, while in the third quarter the indicator was at 3.2%.
In general, the overall news background for the currency pair remains positive, and the single European currency will likely enjoy increased demand amid local pullbacks of the prices.
From a technical point of view, the situation develops in the way of correction. The nearest support is at the level of 1.2360. The main support level is located at the round level 1.2300.
Our recommendations-longs at levels 1.2300-1.2330

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