The EUR/USD pair has seen a slight correction yesterday amid a rebound of the U.S. dollar. The greenback managed to gain due to a recovery of U.S. stocks, but the fears of a trade war between the U.S. and china are still concerning the markets. Support is seen at 1.225, resistance at 1.235.
Yesterday brought some disappointment for the common European currency. Retail sales in Germany was weaker-than-expected with the readings coming at -0.7% m/m and 1.3% y/y. The manufacturing PMI came mixed. Today will bring a batch of important numbers from the bloc as we’re waiting for the preliminary inflation reading for March and unemployment reading for February. Core inflation is expected to rise from 1.0% in February to 1.1% in March year-on-year, headline inflation is expected to rise to 1.4%. Although EBC’s president raised concerns about the inflation, which is currently seen way below 2% target, even a slight uptick may support the euro. The currency may find some further support after the unemployment data as the rate is expected to drop from 8.6% to 8.5%.
The greenback has gained amid a recovery seen on Wall Street after some heavy drops, but the currency’s outlook is still highly uncertain. On Tuesday, Donald Trump’s administration informed about imposing 25% tariffs on 1300 Chinese goods. Chinese officials said Beijing will take countermeasures of a same scane and intensity against U.S. goods. Today we’re expecting for the release of ADP employment data, ISM non-manufacturing/services, factory orders and durable goods orders.
Pic.1. EUR/USD chart.
Although the U.S. dollar managed to rebound slightly, it still may find itself under pressure again. The greenback’s direction will be mostly driven by today’s readings. Any kind of a disappointment or an increase of the tensions related to the trade war may support the euro and push the pair higher.