Market participants are waiting for Donald Trump’s announcement about strong response to China and sanctions against it. Such expectations have a negative impact on the US dollar. The eurozone inflation slowed down to 0.1% from 0.3%. The data turned out to be below the forecast of a 0.2% drop. Nevertheless, the euro is still confidently advancing. On a yearly basis, consumer prices slipped by 0.1% pointing to a beginning of deflation. It was obvious that the ECB would take measures to save the European economy. Thus, the regulator decided not to wait until the next meeting. Before the publication of the eurozone inflation data, ECB had announced its intention to expand the quantitative easing program. This news became an additional reason for the euro appreciation. Investors are encouraged by the regulator’s readiness to do its best to avoid the worst scenario. According to the comprehensive analysis, there is a significant change in the euro/dollar chart. The quote broke the range and approached the high of 1.1147 logged on March 27th. Thus, the main trend has changed. It could lead to a surge of market activity. The levels of 1.1147-1.1190 are of primary importance now. They could weigh on market participants pushing them to fix long positions. This may trigger the technical correction of the price. Let’s take a look at the pound sterling. Investors are shocked by the UK car production data. In March, the UK produced over 78.5 thousand cars whereas in April, the car production skidded to 197 units. The indicator has never hit such low levels. The fact is that a lot of sectors depend on the car production. So, it is obvious that the whole production sector will face a nosedive. Moreover, producers will have to reduce staff members that, in its turn, may lead to further rise in the unemployment figure.
The pound/dollar pair once again returned to the level of 1.2350. There, it faced resistance and bounced. It is quite possible that next time, the pair may break the level of 1.2350. The pair could also drop to 1.2250-1.2210, if it consolidates below 1.2280.
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