Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Common currency drifts away from the session’s minimum
On Tuesday, the common currency drifted away from the low of the day following remarks from the leader of the Italian political party "Five-Star Movement." The statements have tamed worries of traders about the prospect of Italy's escape from the European Union.
As a matter of fact, the currency pair EUR/USD showed 1,1553, having dived to 1,1511, which is the lowest reading since July 20, 2017.
The common currency was underpinned after the leader of the Italian political party "Movement of Five Stars" Luigi Di Maio posted on Facebook that he never relished a thought of abandoning the European Union.
This comment showed up in the face of a steep ascend in the revenue of American government bonds because of the deepening political meltdown in Italy that spurred worries as for the collapse of the European Union.
On Sunday, Italian President Sergio Mattarella neglected approving the post of Minister of Economy as well as Finance of the representative of the Eurosceptic party. Apparently, the given move made the representatives of populist parties return to the president the mandate to build up a coalition government. Currently, Italy is waiting for new elections.
Market participants are afraid that the new elections can be considered as a sort of referendum on the role of this country in the European bloc. Therefore, the positions of anti-European parties can be further strengthened.
The rating agency Moody's told on Tuesday that the development of the political situation in Italy for the last several days couldn’t impact the very decision of this organization to place Italy's credit rating for a downward revision.
The common currency rallied versus the Japanese yen. The currency pair USD/ JPY dived 1.18% reaching 125.77 having dived during today's trading session to 125.06, which is the lowest reading since late June last year.
The EUR made a significant rise on the news of the stimulus expansion. Will it last long?
April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!