The bears of the euro-dollar set cannot break through the support level of 1.1510 to break the ice for a more decline, taking a new cost specific niche in the location of 13-14 figures. As soon as the down impulse faded, the pair’s bulls took the effort and returned the cost to the 16th figure. However, the development of the pair likewise looks unsure, while the rate is below 1.1650. As an outcome, due to the weak point of both bears and bulls, the set flew in anticipation of the next news driver.It must be noted that the European currency reacted relatively calmly to the news that Beijing will present additional 25-percent responsibilities on United States items worth $16 billion. We are speaking about metal products, oil, medical devices and vehicles. The new tariffs will be effective from August 23– that is, from the very same day when Washington will impose duties on Chinese imports in the quantity of 25%, in the quantity of$ 16 billion.Despite the new round of the trade war, the single currency remained practically on the exact same positions as the dollar. Although earlier the euro had responded rather painfully to the escalation of the trade conflict, mostly since of the position of the European Reserve bank, whose members carefully monitor the characteristics of the trade dispute. Probably, the reason for this stability depends on the current reports from China. Exports and( especially)imports showed excellent results; China’s forex reserves in July rose by$5.82 billion (rather of the anticipated decrease of$12 billion). ); inflation in yearly terms is likewise growing for the third month in a row-published on Thursday, the figure for July was better than forecasts, reaching 2.1 %. The yuan, which fell against the dollar given that April, suspended its decline.This circumstance is holding back the weakening of the European currency, despite the continuous trade war. Especially versus the background of the decrease in the dollar index, which in turn responded to the decline in the yield of 10-year Treasuries. After all, the above-mentioned favorable patterns are largely balanced out by the actions of Washington and Beijing. It is apparent that at the minute none of the celebrations is ready to jeopardize and sits down at the negotiating table, so we expect more than one series of the US-Chinese”action-series “. However, macroeconomic reports from China play just an indirect function in identifying the motion of the euro/dollar set. On Friday, all the attention of traders of this set will be focused on the release of data on the growth of US inflation.
The customer price index ought to reveal a favorable( albeit very little)trend, increasing to 0.2 %on a regular monthly basis and to 3 percent on a yearly basis. The core inflation index is likely to remain at the June level( 0.2% mom, 2.3 %yoy). If the release comes out at a forecast level, the dollar will get a need to enhance– due to the fact that in this case, the possibility of a rate trek in September will approach 100%, and the possibilities of a December boost will increase again, as much as 70-80%. Here it is worth recalling that at one of the recent Fed meetings, the views of the regulator members were
divided: inning accordance with some officials, the level of inflation permits further tightening up of monetary policy, however, according to their coworkers, the stability of inflation indications is doubtful. In this aspect, Friday’s figures will play an unique function. If the CPI comes out at least at the projection level, bears of the EUR/USD will be enough. In turn, the bulls of the pair will have the ability to seize the initiative if the indicators come out or at the zero level or fall into the unfavorable area. And the unfavorable outcome of Friday’s release will not impact the confidence of the market concerning the September rate hike( this concern is nearly solved )– the topic of conversation will be the possible tightening up of financial policy at the December meeting.Thus, the information on the growth of United States inflation will provide another chance to either bulls or bears of the EUR/USD pair to break out of the flat range– that is, to either exceed the level of 1.1650 or to get a grip under the mark of 1.1510. The set is likely to stay within this rate niche if the release will be at the level of forecasts( or the minimum variance). But from a technical perspective, whatever mentions the concern
of the down motion. On the day-to-day chart, the pair is under the Kumo cloud of the Ichimoku Kinko Hyo indicator, which formed a bearish” Parade of lines”signal. In addition, the rate lies between the average and the lower lines of the Bollinger Bands indicator, which also indicates a downward movement. The nearby support level is 1.1510(the lower line of the above indicator). The resistance level is the cost of 1.1650-the lower boundary of the Kumo cloud (on D1), which accompanies the average line of the Bollinger Bands indication and with the Tenkan-sen line.The product has actually been provided by InstaForex Company-