Tuesday, 6 February 2018
Yesterday EUR / USD has dropped more than 100 points
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trading signals
Yesterday EUR / USD has dropped more than 100 points on the background of coincidence of two factors corrective USD dollar gains and the comment of the ECB head.
After strong data on US labor market, investors left in a good mood for the weekend, which was saved and implemented on Monday. Good statistical data from the US supported by these undertakings, PMI in non-production sector unexpectedly came out well above the forecast, 59.9 against 56.5. Even more unexpectedly, ECB head came to the aid of EUR/USD bears with their comments about concerns on the growth of the euro. According to Draghi, this creates additional obstacles for the ECB and could adversely affect the inflationary indicators in the Eurozone, so the regulator will closely monitor the situation on the foreign exchange market.
Investors took the signal from the ECB and reacted to it in the appropriate way, but it is too early to talk about some kind of a global turnaround for this currency pair. Neither Europe nor the United States this week will not provide us with really important economic news, so most likely in the coming days we will see a certain stabilization of the situation on the EUR / USD pair. The single European currency still has the potential for growth, while the dollar remains vulnerable, despite a two-day persuasive growth.
The local support for the euro is provided by domestic statistics, the volume of production orders in Germany in December unexpectedly increased by 3.8%, with a forecast of only 0.7%.
Nevertheless, the stronger development of the corrective movement for currency pairs will only be possible after the breakdowns and price fixing below the key support at the moment in the area of 1.2300 mark. Until then, the scenario with the development of the sideway trading within the levels of 1.2337-1.2500 is more likely to be seen.
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