Fundamental analytics

EUR / USD: the dollar strengthens against the background of a decrease in tensions between the USA and Mexico


The EUR / USD pair opens a new trading week with a correctional decline, after the update of the maximum in more than 2.5 months.

The main driver of growth in the currency pair last week was the US dollar. Investors began to quite actively reduce long positions on the US currency against the background of the publication of weak data on the labor market and the Fed's signals about a possible easing of monetary policy due to increasing foreign trade risks.

Today, the market situation has changed somewhat. The US dollar is again in demand against the background of a decrease in tension in relations between the USA and Mexico. By tradition, Donald Trump, wrote through a message in his twitter account, that the United States and Mexico signed an agreement, so the planned increase in tariffs for Mexican goods on Monday is postponed indefinitely. This happened after the trading session was closed on Friday. Trump did not announce the details of the agreement, noting that it will later be published by the State Department.

The European currency so far can not oppose the dollar, as the EU economy continues to experience serious difficulties that force the ECB to launch a new lending program for banks to maintain and stimulate growth. Against the European currency, there are domestic political problems of the EU, as well as risks associated with Brexit.

Today there are no important economic news in Europe and the USA, so the main influence on trading will be provided by the situation on stock exchanges and the general risk attitude of investors. It is also worth considering that today is a day off in Germany, which may have a restraining effect on the movement of the EUR / USD pair during the European trading session.

On the chart from 1.1335, a correctional movement develops, the main target for which is the level 1.1260. It was from this level that the last bullish wave was developed, within which the price was able to update the local highs. Therefore, if this range will be re-tested again, we can count on the resumption of upward movement.

· Resistance levels: 1.1335, 1.1350, 1.1400.

· Levels support: 1.1260, 1.1220, 1.1180.

The main scenario is a decline to 1.1260.

An alternative scenario - consolidation in the range of 1.1300-1.1335.

Locally, the market is dominated by a moderately negative news background, which contributes to the development of a correctional wave of EUR / USD. Therefore, intraday preference should be given to shorts, which should be found at the level of 1.1335.


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