EUR/USD Forecast: sellers aligned around 1.2300
- Disappointing EU macroeconomic data weigh on the common currency.
- Equities up in Europe, bypassing escalating tensions about a trade war.
Markets are on a better mood at the beginning of the week, with Asian and European equities trading in positive territory, although the sentiment barely reflects in the FX board, with safe-haven yen and gold barely down, commodity-related currencies easing, and the EUR/USD pair trading mute around 1.2280.
In the data front, the calendar has so far offered the German Trade Balance for February which showed that the surplus shrunk to €19.2B, while both, exports and imports decreased sharply. Also, the EU Sentix Investor Confidence index for April came in at 19.6, below the previous 24 and the expected 20. The report blamed the slide in EU sentiment, the first since July 2016, to the escalating tensions around a possible trade war.
Trump twitted on Sunday that he and Chinese President Xi Ping are "friends," and that taxes will become reciprocal, while a "deal will be made on intellectual property," probably the reason why market mood improved today. The US calendar has nothing relevant to offer today.
The short-term technical picture is neutral, given that in the 4 hours chart, the pair is barely holding above a flat 20 SMA, while technical indicators lack directional strength around their mid-lines. Early attempts to advance were contained by selling interest around 1.2290, making of the level the immediate resistance, followed by 1.2335 and 1.2370, although chances of a rally up to this last are pretty much null. Supports, on the other hand, are located at 1.2250 and 1.2215, this last, the low set last week.
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
