The EUR/USD currency pair jumped dramatically in the first half of the week. It hovered just below this key 1.1300 level. The US Dollar was all under the most notable pressure. This was driven by a resurgence in trade fears and an increasing worry about the state of the US economy. The intersection of all these factors has stoked expectations for possible additional gains for the Euro against the Dollar.
During a series of bearish trading sessions, the EUR/USD climbed considerable inches with the 1.1300 level in focus. This increase came during one of the more dynamic sell-offs in the Greenback itself, which has been struggling with its own basket of macroeconomic headaches. According to analysts it is very possible that the pair breaks the way past this important area. If it can, upward focus lies on the May highs just above 1.1380.
Renewed trade tensions have added to the headwinds buffeting the Dollar. Consequently, its fortunes have fared poorly in the forex markets. Recent news has indicated that economic uncertainty is putting a damper on investor sentiment. “China April slowdown shows the impact of economic uncertainty,” highlights a recent analysis from FXStreet, reflecting broader concerns that are reverberating through global markets.
The most recent data out of China indicated a further slowdown in economic activity through April, partially due to persistent uncertainties from the trade war. This development has contributed to the erosion of confidence amongst Chinese entrepreneurs and foreign investors both. Moreover, as China’s economy slows down, the impacts are being seen around the world—including right here in the US economy. This is because the slower economic activity in China has directly contributed to the pressure on the US Dollar.
As EUR/USD approaches that all-important 1.1300 line in the sand, traders are on tenterhooks. They’re closely monitoring developments in trade talks and economic data on both sides of the Atlantic. The outlook continues to be guarded as concerns are increasing about the sustainability of current economic growth.
“EUR/USD: Next on the upside sits the May highs near 1.1380.” – www.fxstreet.com