- Fed chief says U.S Jobless rate may reach 30%.
- U.S dollar gains backing amid talks of easing trade restrictions.
The EUR/USD currency exchange is off to a bullish start as the dollar maintains its strength and against the Euro. This comes amid the rising trade tensions between China and the U.S., but those concerns seem like the expectations of eased coronavirus restrictions have overshadowed them. Meanwhile, the Euro took a bit of a hit due to the expectations that the central bank will adopt negative interest rates in light of the worsening economic conditions.
Time : 18/05/2020
Pivot : 1.0821
Technical review : Long above 1.0841
Target : 1.0846, 1.0854 and 1.0861
Technical review : Short below 1.0794
Comments : Weak Bullish
Last Price : 1.0815
The EUR/USD exchange rate traded at 1.0817 at the time of this press. The exchange rate is expected to experience strong demand at around the 1.0782 and 1.0883 price levels and strong supply at around the 1.0850 and 1.0749 price zones.
The U.S recently decided to ease its lockdown measures, and that means demand for commodities will go up, and so will business activities, thus providing strong support for economic recovery. The decision contributed to the U.S dollar’s strong gains. The greenback has also received significant buoyancy thanks to the Federal Reserve Chairman’s statements regarding the U.S economy. He noted that the rate of joblessness in the U.S will likely reach 30%. However, he says that he does not expect the economy to slide into a depression.
Powell also said that he expects the U.S economy to experience positive growth in the third quarter. The Fed chair believes that the current direction will lead to recovery, especially in the long-run. As far as the short-term is concerned, the EUR/USD might be affected by upcoming data. For example, buildings data will be released on Tuesday, and with the way things have been going, the data is expected to be negative. While this may hurt the dollar’s performance, the positive sentiments, especially with the recently eased restrictions, will likely overpower the negative expectations.