Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Euro is still high, as greenback slides
On Friday, the common currency was still high because the evergreen buck declined and trade worries didn’t recede.
The currency pair EUR/USD managed to ascend by 0.26% reaching 1.1633 because German and French business activity in June turned out to be higher than anticipated, relieving worries of a slowdown in the European Union.
The UK currency was also high too. The currency pair GBP/USD managed to ascend by 0.20% being worth 1.3268.
The USD index, used to estimate the greenback’s purchasing power against six key currencies, inched down by 0.19% demonstrating a reading of 94.36.
Trade tensions between America and its allies resumed because on Friday the European Union put tariffs on $3.4 billion of American imports, including whiskey, motorbikes, and jeans in response to Donald Trump’s aluminum and steel duties.
Responding to this EU’s move, Trump wrote on Twitter that if the European Union doesn’t remove the duties, the US government will have to impose a 20% duty on all their vehicles coming to America.
The duties have backed tensions because market participants are afraid of a probable fierce global trade conflict between America as well as other key countries.
The evergreen buck was also held back by a slump in the Philadelphia Federal Reserve’s manufacturing index, which took place on Thursday. The index went down to a one-and-a-half-year minimum, spurring worries as for the strength of the American economy.
The US currency dived versus the safe-haven Japanese yen. The currency pair USD/JPY dipped by 0.07% hitting 109.91. In times of uncertainty, market participants are prone to investing in the Japanese yen because it’s considered a reliable safe asset during tough periods.
In addition to this, the Australian dollar managed to ascend. The currency pair AUD/USD gained by about 0.65% reaching 0.7425,
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!