Fundamental analytics

EUR / USD pair can not determine the trend


EUR / USD on Wednesday was able to complete trading in the green zone, showing a result of + 0.15%, but if to look at the bigger picture, in the medium-term instrument will maintain the side direction of movement. Investors cannot decide on a further price movement vector, since both currencies are locally under pressure from important fundamental factors.

A serious deterrent for the European currency is the situation in the economy of the Eurozone. The market continues to receive signals of a slowdown in economic activity in the region. Investors are especially concerned about the situation in Germany, where the government of the country intends to once again reconsider forecasts for GDP growth rates for 2019, lowering them from 1.0% to 0.5%. Recall that in the beginning of the year, the government has already carried out an adjustment of this indicator, changing it from 1.8% to 1.0%.

In this regard, data for PMI of the manufacturing and services sectors, both for the EU as a whole and for individual countries of the Union, including Germany, will be important for the market today.

The dollar also locally remains under pressure from unconvincing internal statistics. Geopolitical factors put even more pressure on the US currency. Positive statements by the White House on the course of trade negotiations significantly reduced investor’s interest in the dollar, which many had previously viewed as the main protective asset against trade risks.

Today in the United States the preliminary data on the PMI of the production and services sectors will be published, but investors will focus on the retail sales report mostly, which in February was worse than market expectations, weakening the position of the US currency. After a February decline of 0.2% in March, experts expect sales to grow by 0.9%, which, if confirmed, could strengthen the position of the dollar before the long weekend. We must not forget that tomorrow the financial markets of the USA and Europe will be closed, Good Friday.

On the chart, the situation remains uncertain. On the one hand, the currency pair is held within the ascending channel, which indicates a further priority towards the development of an upward movement in the direction of the level 1.1370. On the other hand, throughout the week, the price cannot break through the resistance of 1.1320, which limits the further price movement upwards. Moreover, now we see an increase in downward pressure on the lower border of the price channel, which is a signal for the breakdown of this level and the development of the bearish wave to 1.1250. More likely to work out now is exactly the second scenario.

· Resistance levels: 1.1320, 1.1370, 1.1430.

· Levels of support: 1.1280, 1.1250, 1.1193.

The main scenario - decline to 1.1250

An alternative scenario - consolidation above 1.1320 and growth to 1.1370.

The news background in the market remains neutral, while on the chart the outset is developing throughout the week, in a fairly narrow range. There are no good signals to enter the market now, so we recommend refraining from active trading with this instrument.

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