Euro gets good support
May 15, 2018 1:21 amVideo
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The European currency continued to strengthen its position against the US dollar and a number of other world currencies due to good geopolitical news, as well as statements by representatives of the ECB.
In the first half of the day, a statement was made by the head of the Bank of France, he said that net asset purchases will end when inflation steadily adjusts. Francois Villeroy de Galo also drew attention to the fact that the ECB is gradually approaching the end of the asset purchase programme, as the current slowdown is likely to be temporary.
Let me remind you that the main risks that the European regulator faced earlier this year were directly related to the slowdown in inflation in the Eurozone, as well as the fall in economic indicators, which significantly increased by the end of 2017. A number of experts agree that this phenomenon is only temporary, and by the end of the 2nd quarter of 2018 the situation will radically change for the better.
The ECB representative also noted that he would not delay the normalization of policy to help solve problems with debts. The ECB economist, Francois Villeroy de Galo, also believes that it is necessary to better understand the side effects of quantitative easing.
The same statements were heard from representatives of the Central Bank of the United States at the beginning of last year, when the Federal reserve changed course to a more rapid increase in interest rates.
Good support for risky assets is provided by news from Italy, where it became known that the political party “Movement of Five Stars” and the far right party “League of the North” reached an agreement on the formation of the government. This reduces political risks, which will certainly affect the euro. According to experts, even despite the fact that the Italian government will consist of representatives of populist parties, such a solution allows it to find a way out of the political impasse.
US President Donald trump made a speech on Monday. Despite the fact that it was more about Israel, trump did not forget to mention the problems associated with the trade war. The President of the United States said that the main task of America is to achieve a long-term peace agreement, which is good news for the European Union, since in March of this year, the risk of imposing trade duties on the part of the United States was introduced.
As for the technical picture of the EURUSD pair, buyers will continue to gradually approach a large resistance level around 1.2020, which may lead to the closure of a number of long positions in risky assets after a good upward correction formed in the middle of last week.
The material has been provided by InstaForex Company – www.instaforex.com
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