The EUR/USD significantly slipped yesterday amid the US dollar’s strength seen all across the boards. The greenback regained strength, holding back the pair from climbing towards the 1.25 level. Today’s theme of the day will be the NFP data release. Support is set at 1.23, resistance at 1.24.
The euro has been trading in a strong manner since the beginning of the week, while the dollar was on the backfoot due to the steel and aluminium tariff plan. This has raised fears about a global trade war. The biggest economies have instantly reacted to Donald Trump’s plan. The European Union said it would take retaliate actions and impose tariffs on goods imported from the US.
The US president has signed the plan yesterday, but it seems it’s more elastic it was previously thought, as Mexico and Canada will be excluded from the tariffs. The plan also gives the possibility of introducing exceptions for other countries. Markets saw this as good news for the greenback, which strengthened considerably. The markets have also positively reacted to the news that Donald Trump would meet with the North Korea leader, Kim Jong Un.
Yesterday we had the meeting of the European Central Bank regarding its monetary policy. The bank kept the rates unchanged, while raising its GDP forecasts fo 2.4% in 2018, 1.9% in 2019 and 1.7% in 2020. The bank has also informed it will continue its quantative easing program until September, but it may be extended if economic conditions would change.
Pic.1. EUR/USD chart.
The EUR/USD pair is currently seen just above the 1.23 level. Non-farm payrolls, unemployment numbers and average hourly earnings will be the main factors driving the pair today. Good readings may further support the dollar and bring an attempt to break down below the current support.