By Gabriel Ojimadu, Alpari
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Since the euro’s collapse on Thursday during Mario Draghi’s press conference, the daily candlesticks have closed up two days in a row. At the beginning of yesterday’s European session, the euro slid to 1.1565. It then recovered to 1.1620 in the US session, and climbed higher to reach 1.1645 in today’s (Tuesday’s) Asian session. The market’s fluctuations yesterday occurred against the backdrop of an escalation in the trade dispute taking place between the US and China.
US President Donald Trump intends to impose additional tariffs of 10% on 200bn USD of Chinese goods. The Japanese yen and Swiss franc have been enjoying increased demand.
Day’s news (GMT+3):
- 11:00 Eurozone: current account (Apr), ECB President Draghi’s speech.
- 11:30 Eurozone: ECB’s Praet speech.
- 12:00 Eurozone: construction output (Apr).
- 14:00 Eurozone: ECB’s Praet speech.
- 15:30 USA: building permits (May), housing starts (May).
- 23:30 USA: API weekly crude oil stock.
Fid 1. EURUSD hourly chart. Source: TradingView
Current situation:
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In today’s Asian session, the euro rose to 1.1645. The trade dispute between the US and China remains the day’s key focus. China has vowed to respond in kind to this new set of US tariffs. The two governments’ inability to find a compromise is pushing investors towards safe haven assets; namely the yen and franc.
The euro didn’t remain at 1.1645 for long. By the opening of today’s European session, the rate had dropped to 1.1603. The euro is under pressure from disagreements over immigration policy in the German coalition government, as well as delays in curtailing the Eurozone’s QE program.
I missed a good entry point this morning. I decided not to try and jump on the moving train. It should turn out as it did yesterday; a 28-pip rebound from the 67th degree and a new high. Moreover, the rate has reached the LB balance line. The 45th degree is at 1.1591, which is getting support from the trend line of the correctional movement. A breakout of the trend line (if the hourly candlestick closes below the line) would open the way towards 1.15.
