EUR/USD: Hard to keep it down
- EUR/USD is clinging to 1.1300 once again, after a short dip.
- Chinese GDP and some euro-zone figures set to dominate.
- The technical picture remains bullish for the pair.
is recovering from the lows and trading around 1.1300 once again. Attempts to break lower failed once again, and the pair is back to the tight range. The small drop on Tuesday can be attributed to USD strength and the recovery is related to upbeat figures from China.
The world’s second-largest economy reported an annualized growth rate of 6.4% in the first quarter of 2019, slightly better than 6.3% projected. Industrial output for March also exceeded forecasts with 8.5%. China’s stimulus, via looser credit and other means, seems to work, and it helps improves the mood.
However, the euro-zone is not doing so well. Concerns about growth in the old continent dominated talks at the International Monetary Fund’s gathering in Washington. Germany refuses to budge from its low-debt policy despite pressures to spend money to stimulate its economy.
Not all is negative for EUR/USD in terms of data. On Tuesday we learned that the German ZEW Economic Sentiment beat with 3.1 points in April while US Industrial Production disappointed with a drop of 0.1%.
Final euro-zone inflation numbers are expected to confirm the low levels reported in the initial read: 1.4% headline inflation and 0.8% on Core CPI in March. Trade balance for February is set to show a slightly narrower surplus in the euro-zone and a marginally broader deficit in the US. FOMC member James Bullard speaks later, and he will likely reiterate his dovish stance.
So far, data points from both sides of the Atlantic have been second-tier. Top-tier are due on Thursday: euro-zone PMIs and US retail sales.
All in all, further reactions to China’s GDP and the general market mood are set to dominate the next moves.
EUR/USD Technical Analysis
EUR/USD continues enjoying upside Momentum on the four-hour and trades above both the 50 and 200 Simple Moving Averages after a brief dip below the 200 one. The Relative Strength Index is on the rise once again.
Resistance awaits at 1.1330 that capped the pair on Friday. 1.1360 held it down in mid-March and 1.1390 was a swing high later last month. 1.1420 and 1.1445 are next.
Immediate support awaits at 1.1280 was the recent low. 1.1250 provided support last week, and 1.1210 cushioned EUR/USD earlier this month.