EUR/USD: Euro Again Ready For A Breakout Of The Trend Line

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The EUR/USD pair closed up yesterday for the second day in a row. Over the last few days, a false breakout of the trend line has been confirmed. The Euro strengthened against the US dollar to 1.0630, but that’s as far as buyers managed to push the price. As traders avoided risk and the main EUR/GBP cross fell, our EUR/USD pair went into a correctional phase.

The Euro’s fall against the pound and dollar coincided with a rise in quotes for gold and yen. This flight to more defensive assets and a fall in US bond yields were brought about by rising political tensions relating to Syria and North Korea.

US president Donald Trump has stated that Washington will deal with North Korea with or without China’s cooperation. North Korean state media has issued a statement warning of a nuclear attack on the US in the case of any provocation.

Market expectations:

Treasury bonds are currently in the red while gold and yen are appreciating. Investors are worried by the growing political tensions in Syria and on the Korean peninsula. The upcoming elections in France are also giving them cause for concern.

The single currency lost some ground against the greenback during the EUR/GBP cross’s fall, but falling US bond yields has been providing support for buyers.

Taking the long weekend ahead into account, I’m expecting our pair to continue its sideways trend. For the US session, today I’m expecting the dollar to strengthen to 1.0632.

Day’s news (GMT+3):

11:30 UK: average earnings (Feb), claimant count change (Mar), unemployment rate (Feb);

11:40: BoE governor Mark Carney’s speech;

15:30 USA: import price index (Mar);

17:00 Canada: BoC interest rate decision;

17:30 Canda: BoC monetary policy statement;

17:30 USA: EIA crude oil stocks change (Apr 7);

18:15 Canada: BoC press conference;

21:00 USA: monthly budget statement (Mar).