The EUR / USD pair was trading multidirectionally on Wednesday and closed trading at the opening of the day.
In the first half of the day, economic data from Europe provided pressure on the price. Preliminary data on the growth of annual GDP in Germany for the first quarter were slightly below market expectations, 0.6%, with a forecast of 0.7%. At the same time, data on EU GDP growth coincided with market expectations. Quarterly changes were + 0.4%, and the annual growth rate was 1.2%.
In the second half of the day, buyers were able to regain their previously suffered losses against the background of the positive news related to international trade and the publication of very weak economic statistics in the United States.
Yesterday, the White House administration announced that Donald Trump decided to postpone the decision to impose import duties on cars and spare parts for them, which was opposed by the key US trade partners - Japan and the EU.
Almost all the statistics published on Wednesday in the United States were below market expectations. The volume of industrial production in April fell by 0.5% (a forecast of 0.0%), the volume of retail sales for the month decreased by 0.2% (the growth was forecast at 0.2%), the basic index of retail sales grew by only 0, 1% (projected growth of 0.7%). Against the background of weak retail sales data, the Atlanta Federal Reserve Bank lowered its forecast for US GDP growth in the 2nd quarter from 1.6% (forecast from May 9) to 1.1%.
Today, in the first half of the day, investors will follow the speech of President Bundesbank Weidmann, who is the most likely successor to Mario Draghi as head of the ECB.
In the afternoon, investors will focus on US economic statistics. Today we are waiting for April data on the construction sector and indices on production activity and employment from the Federal Reserve Bank of Philadelphia. Weaker data may have a significant pressure on the dollar, given the reports published earlier.
On the chart yesterday, the previously noted support level of 1.1180 was tested, from which the price bounced back quite quickly. This is a signal towards the development of a local upward movement, the potential of which is still limited by the level of 1.1260. It is necessary to rely on the formation of a stronger trend movement only after the breakdown of resistance at 1.1260 or support at 1.1180.
· Resistance levels: 1.1260, 1.1320, 1.1430.
· Support levels: 1.1180, 1.1150, 1.1100.
The main scenario - growth to 1.1260.
Alternative scenario - support breakdown at 1.1180 and decline towards 1.1150.
The market as a whole maintains a neutral news background, which contributes to the development of the range between the levels of 1.1180-1.1260. Within this range, we recommend considering longs from the level of 1.1200.