The EUR/USD pair stayed in consolidation mode with a slightly bullish bias yesterday. Latest news suggest that the tariffs on steel and aluminium in the US may not be imposed. This has brought some support for the dollar, but the markets are already focusing on the Thursday’s EBC monetary policy meeting. Support is set at 1.23, resistance at 1.24.
Last week Donald Trump rattled the world markets once again by informing about plans to impose tariffs on steel and aluminium imports. This sparked instant reaction of the European Union, which announced it will take retaliate actions and impose tariffs on US goods. Fears emerged that Trump’s plans will cause a global trade war. On Monday, Donald Trump suggested that the tariffs may be off the table if a „fair” NAFTA deal is reached. This eased down the fears and supported the greenback.
In the meantime, the euro is doing quite good, even despite the result of the Italian parliamentary election results, where a coalition of right-wing parties and anti-establishement Five Star Movement got the most votes. Although yesterday’s PMI readings came a bit below the expectations, they still show good condition of the bloc’s economy. Retail sales data came above the market consensus at 2.3% while 2.0% was expected. The markets are now focusing on the EBC’s monetary policy meeting on Thursday. If the central bank would suggest any kind of a shift of it’s easy monetary policy, it would further support the common currency.
Pic.1. EUR/USD chart.
The greenback caught a breath amid the information that the tariffs on steel and aluminium import isn’t a done deal year, but the euro was able to hold its ground. Factory orders and durable goods orders numbers will be the main factor driving the pair.