The euro cannot manage to recover
20.05.2014
On Tuesday morning the main currency pair once again attempted a technical rebound - but there are reasons to expect that the present attempts to recover will be as ineffective as yesterday.
The euro/dollar does not have the “strength” or the drivers to complete at least a technical rebound. It does not have to go to a full restoration - there is no reason for that, but any attempt of the euro bulls to pass beyond the significant resistance still looks vague.
The empty calendar for statistics helps this along. After the ECB has made clear it’s displeasure about a high euro exchange rate, the base pair lost all chances to return to the peaks in the short term. But the February lows still have space to deepen.
The medium term will largely depend on the inflationary parameters. If the data for May can show the recovery that emerged in April (0.7% y/y previously strengthening by 0.5% y/y) then the euro currency will have a reason "grow back". Although everything will depend on the accompanying comments from the ECB.
On Tuesday the macroeconomic calendar is almost empty. It is currently known that the producer price index in Germany in April fell by 0.1% m/m although no changes in the indicator were expected. However, the response to such a report is unlikely to be very pronounced.
RoboForex Analytical Department
The euro/dollar does not have the “strength” or the drivers to complete at least a technical rebound. It does not have to go to a full restoration - there is no reason for that, but any attempt of the euro bulls to pass beyond the significant resistance still looks vague.
The empty calendar for statistics helps this along. After the ECB has made clear it’s displeasure about a high euro exchange rate, the base pair lost all chances to return to the peaks in the short term. But the February lows still have space to deepen.
The medium term will largely depend on the inflationary parameters. If the data for May can show the recovery that emerged in April (0.7% y/y previously strengthening by 0.5% y/y) then the euro currency will have a reason "grow back". Although everything will depend on the accompanying comments from the ECB.
On Tuesday the macroeconomic calendar is almost empty. It is currently known that the producer price index in Germany in April fell by 0.1% m/m although no changes in the indicator were expected. However, the response to such a report is unlikely to be very pronounced.
RoboForex Analytical Department
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.