Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Greenback hits a multi-month high
On Tuesday, the evergreen buck managed to ascend to a maximum of 11 months, while the common currency went down after American leader Donald Trump threatened to put fresh tariffs on the import of China’s goods, driving traders’ worries that a trade dispute between the two leading economies could affect global GDP surge.
On Tuesday, Donald Trump threatened to impose 10% tariffs on the import of China’s goods worth nearly $200 billion. In return, the Chinese government instantly warned of corresponding countermeasures.
The evergreen buck ascended versus a basket of key currencies because market participants expect that the resuming trade contradictions between the United States and China will provoke an acceleration of inflation in America and probably another interest rate lifts.
The Japanese yen managed to grow by approximately 0.6% versus the evergreen buck getting to 109.84. As a matter of fact, the US dollar index hit 95.266 - the greatest value since July 2017. However, later it gave up some of its revenue, showing an outcome of about 95.185.
The common currency was still pressured in the face of controversy within Germany's ruling coalition as well as hopes that interest rates in the eurozone will remain intact until at least mid-2019.
The downtime in Germany’s ruling coalition went up due to the fact that disagreements regarding the migration policy between Chancellor Angela Merkel as well as her allies from the Bavarian Christian Social Union. As a matter of fact, the chairman of the CSU, Horst Seehofer, Germany’s Minister of the Interior, calls on unilaterally to limit this everlasting influx of refugees to his country notwithstanding Merkel's objections.
The common currency managed to dive to a two-week minimum of about $1.1531 after ECB Governor Mario Draghi called for a moderate approach to lifting interest rates.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.