Although the current situation between the U.S. and China is still tense, yesterday’s speech of Xi Jinping eased investor concerns about a potencial trade war a little. In Europe, Mario Draghi’s comments have bolstered the euro. Support is set at 1.225, resistance at 1.235.
The dollar index has slightly gained and climbed to 89.885. Most of the last two weeks passed under the sign of news about the escalation of a trade conflict between the U.S. and China. Markets were soothed once again after the speech of the Chinese President Xi Jinping. Jinping said China will take measures to lower import tariffs on cars and other products, imposing laws to protect intelectual rights and improving investment conditions for foreign companies.
Donald Trump reacted on twitter by writing „President Xi and I will always be friends”, and China will take down its trade barriers „because it’s the right thing to do”. The greenbacks gains were highly limited, as there are some geopolitical concerns about the relations between the U.S. and Russia on Syria issue. Further pressure comes from a report that FBI offices have raided the office of Donald Trump’s personal lawyer, Michael Cohen.
Although the data coming from the euro zone were rather disappointing, the euro managed to notch some gains after the commentary of Mario Draghi. The European Central Bank’s head said that the last stock markets decline hasn’t materially impacted euro zone financial conditions. The comment was widely interpreted as a sign, that the ending of the EBC’s quantative easing program this year won’t be delayed.
Pic.1. EUR/USD chart.
The economic agenda for today is nearly empty and the markets are mostly awaiting for the inflation and wages data tomorrow. The EUR/USD pair is most likely to stay in consolidation today, while temporary drops should be perceived as an opportunity to open CALL options.