EUR/USD: Euro Remains Under Pressure From Cross

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Trading on the Euro on Monday closed slightly up. The price corrected from 1.0570 to 1.0607. The economic calendar was bare, so market activity remained low. The price spent most of its time in a sideways trend.

A speech from the head of the US Federal Reserve, Janet Yellen, did nothing to surprise markets and thus had no effect on the dollar. She repeated that the US economy is in good shape and that the goal of gradually increasing interest rates is to maintain full employment and keep inflation around the 2% mark without overheating the economy. She made no mention of reducing the Fed’s 4.5 trillion dollar balance sheet.

Market expectations:

Monday’s session closed with the price on the trend line at 1.0595, meaning that the break wasn’t confirmed. This also makes the situation for Tuesday ambiguous as the British pound is showing some positive dynamics against the US dollar.

It’s now important for the euro-bulls whether or not the EUR/GBP cross will rise above 0.8530 level. If it does, the Euro will strengthen across the board.

For Tuesday, I’m expecting the EUR/USD pair to continue its flat. If the EUR/GBP cross manages to develop a bullish impulse, we can expect our pair to surpass 1.0621 as the greenback falls against most major currencies. The highest volume seen during yesterday’s trading occurred at 1.0618. We need to surpass this level in order to discourage the bears from selling.

Don’t forget that we have a long weekend ahead of us. Due to Easter celebrations, European exchanges will be closed from Friday to Tuesday (see our holiday calendar).

Day’s news (GMT+3):

11:30 UK: CPI (Mar), retail price index (Mar), PPI input/output (Mar), DCLG house price index (Mar);

12:00 Germany: ZEW survey – economic sentiment (Apr);

12:00 Eurozone: industrial production (Feb), ZEW survey – economic sentiment (Apr);

13:00 USA: NFIB business optimism index (Mar);

17:00 USA: JOLTS job openings (Feb);

20:45 USA: FOMC member Kashkari’s speech.