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EUR / USD: US inflation data weakened the dollar

Apr 11 2019, 03:42 PM (BDT) | Fortfs.com

EUR / USD on Wednesday held a very volatile trading, which ended in victory for the EUR bulls.

In the morning, the focus was on the ECB meeting, the results of which coincided with market expectations. The regulator left the interest rate and the main parameters of its monetary policy unchanged. At the press conference, Mario Draghi once again noted that the central bank does not plan to change the level of interest rates until the beginning of 2020, since the economic data for the region remain weak, and external and internal risks increase.

A strong surge in volatility on the market was noted during the publication of data on the consumer price index (CPI) in the United States. The annual baseline CPI unexpectedly dropped from 2.1% to 2.0%, while the baseline change compared with the previous month was + 0.1%, with the expected growth of 0.2%.

Another event, closely monitored by investors, was an extraordinary EU summit, which resulted in a decision to grant the United Kingdom a postponement for Brexit until October 31 (Halloween) 2019. At the same time, the UK has the right to exit from the EU earlier, if all the controversial issues regarding Brexit are agreed between the parties. Theresa May said that if the UK fails to make a final decision on Brexit before May 22, the country will take part in the elections to the European Parliament.

Today, the currency pair maintains a positive trend, since the cumulative influence of factors that yesterday had an impact on the market rendered more support to the positions of buyers than sellers.

Among the events that are worth paying attention to is today the publication of data on the producer price index in the United States, and speeches by several FOMC members.

Another attempt by buyers to push support at 1.1250 ended with the formation of a “false breakdown” reversal signal, within the framework of which we should expect further development of the upward movement, the immediate target for which will be the level 1.1320.

· Resistance levels: 1.1285, 1.1320, 1.1370.

· Levels of support: 1.1265, 1.1250, 1.1193.

The main scenario - rollback to 1.1265 and growth to 1.1320.

An alternative scenario - consolidation above 1.1285 and recoilless growth to 1.1320.

The market is dominated by bullish signals, so long positions should be considered within the day, which can be opened near the 1.1265 level.


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