Euro: light at the end of the tunnel
February 1, 2019 3:21 pmVideo
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The recent dynamics of the euro against the dollar resembles a rollercoaster ride. Hence, initially the ECB signals about the possibility of expanding stimulus measures sent the EUR/USD pair below $ 1.13, but then, the Fed’s hints about a pause in the monetary tightening cycle allowed the single European currency to rise to $ 1.15. However, the ensuing weak data on eurozone GDP cooled the fervor of the bulls.
On the eve after the head of the Bundesbank said the German economy has entered a period of short-term deceleration, the euro fell sharply. Today, the single European currency managed to win back some of the losses incurred.
If we assume that in the foreseeable future the Fed will not raise the interest rate and if the economic situation in the country deteriorates, it may even be reduced, then the continuation of the EUR / USD movement to the north seems entirely possible.
In addition, the factors that had a negative impact on the growth of the eurozone economy in the third and fourth quarters are expected to be temporary. The settlement of trade disputes between the US and China will have a positive impact on exports and business activity of the currency bloc.
Thus, the gradual improvement of the state of the eurozone economy and the de-escalation of the trade conflict between Washington and Beijing will act as positive factors for the euro. Although, having understood the Celestial Empire, the United States can switch to Europe. Also, do not forget about the Fed’s intention to make decisions depending on the incoming data.
It is assumed that a strong report on the US labor market in January will allow the EUR/USD bears to develop an attack in the direction of 1.12, while weak statistics will give the bulls the hope of resuming the rally to 1.16.
The material has been provided by InstaForex Company – www.instaforex.com
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