Fundamental analytics

To start your day – corrective pullback is ahead in EUR/USD

EURUSD

Yesterday EUR / USD slightly updated the yearly low, but quickly began to restore its positions. It is important that volatility in the market is no longer connected with ECB and the Fed and we can expect the market activity to return.

Yesterday session began with a new wave of sales on Italy news where the famous Eurosceptic Alberto Bagnay was appointed as the head of the Finance Committee in the Italian Senate. This reinforced fears that new Italian government could raise the issue of leaving the Eurozone.

But surprisingly, another bunch of news came to the aid of the euro, when news broke that EU agreed on the conditions for Greece's withdrawal from the financial assistance program in August 2018, it is expected that this will reduce the debt burden on the country. Investors were very positive about this news, as EUR / USD was able to bounce off away from new annual lows.

Additional support for EUR / USD was provided by news from the United States, where the Philadelphia FED index dropped from 34.4 to 19.9 points, with a forecast of 28.9 points. These figures gave rise to concerns about a slowdown in economic activity in the United States.

As a daily result EUR / USD managed to win back most of the lost positions and today keeps the positive dynamics setting a new weekly maximum. Among the important economic events that may affect the trading today is US and EU PMI data in manufacturing sector.

At the chart, we note the support at 1.552, that can serve as a good basis for a corrective recovery in the direction of resistance formed at 1.1825. It is noteworthy that the technical indicators reacted to the situation change, and they have already turned up. Moreover, RSI formed a strong divergence signal, which strengthens the expectations of the corrective movement in the market.

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