- April’s Producer Price Index (PPI) forecasted at -0.45%.
- Inflation data fail to have a significant impact on the Euro.
- S dollar’s strength aided by renewed COVID-19 and trade war concerns.
The EUR/USD currency pair has kicked off Tuesday morning on a weak bullish performance, interrupting the bearish run that prevailed for the past few days. The currency pair’s performance on Tuesday morning saw the price surge by 0.45% with the bullish run seems held back as investors exercise caution ahead of the upcoming crude oil inventories and PPI data.
The price of the EUR/USD currency pair is expected to experience resistance at the 1.0854, 1.0885 and 1.0915 price levels if it maintains the bullish momentum. However, it reverses, it is expected to contend with the 1.0774, 1.0743, 1.0707 support levels.
Part of the reason behind the bullish momentum on Tuesday morning is that the Euro demonstrated significant strength even after the bleak inflation outlook. The European Central Bank revealed on Monday that Eurozone consumer prices and inflation data have a decreased impact on the Euro’s performance. Meanwhile, investors appear cautious about the market ahead of the upcoming data on crude oil inventories and the PPI which may cause a significant impact on the U.S dollar.
The EUR/USD’s performance in the next few days might be affected by the re-emerging surge in COVID-19 cases. In the past few weeks, the U.S dollar rallied despite the U.S market being one of the most affected global markets by the coronavirus. This is because investors have been using the U.S dollar as a safe haven currency to avoid losses in other currencies especially those that are highly volatile.
A rise in the infection rate may continue to strengthen the USD’s rally. The greenback may also gain courtesy of the ongoing concerns regarding the U.S-China trade war. If the dollar gains due to the above issues, then the EUR/USD currency pair will be up for some bearish movements.