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Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Euro tests 2-month resistance 1.0600 as the dollar index weakens

EUR/USD started this week on a solid bullish momentum, particularly favoured by a weakened US dollar. The Euro underwent an uptrend after an optimistic turnout at the ECB monetary policy meeting last week. The pair had recorded its highest daily gain since March last week's Thursday after the ECB meeting. The bulls' excitement pushed the pair so hard to revisit its previous two months' resistance at 1.06000. However, EURUSD failed to break above this resistance last week before going for a short retracement. On the positive side, EURUSD has returned to this strong resistance during the Asian session, and the bulls are pushing to break it this time.

We are more optimistic that EURUSD will break this resistance this week. Many analysts agree that last week's ECB monetary policy meeting convinced investors for Euro recovery against the US dollar.

However, EUR/USD needs to break above this resistance at 1.0600 to convince investors that the bulls are fully back again. The pair needs to reclaim the 200-SMA level of 1.0665 as a shred of evidence that it has adjusted its trend. This will open the way to further gains towards the 50% Fibonacci retracement of March-May found at 1.0768.

Fundamental Factors that affect EURUSD today

  • The German Ifo Business Climate

This data measures the state of Germany's business environment every month. This data is compiled from a survey involving over 9,000 respondents from German firms in the manufacturing, construction, service, and trade sector.

Notably, the German Business Climate Ifo Survey serves as a leading indicator for significant economic turning points in the German economy.

Policymakers, businesses, and investors use this data to plan future economic activity. Often conclusions are reached using three previous consecutive readings.

This time, a higher reading will be positive/ bullish news for the Euro, while a lower reading will be negative. The forecast for this report is 91.5%. The previous data was 91.8%.

  • German Buba Monthly Report:

Another critical factor influencing the Euro today is the German Buba Monthly Report. To be released by Deutsche Bundesbank. This report contains relevant articles, speeches, and statistical tables showing the progress in economic growth in the past month. It further provides a detailed analysis of the country's current and future economic conditions from the bank's point of view.

  • Belgian NBB Business Climate:

The third important factor influencing Euro today is the National Bank of Belgium (NBB) Business Climate index released during the New York session. This data measures the change in confidence level in the country's business operations. Higher levels above zero show an improving Business environment (Climate), while lower levels significantly below zero show a terrible condition.

A higher reading is seen as positive/bullish news for EURO. In comparison, a lower reading is seen as negative/bearish news.

Finally, the German Buba President Nagal will also deliver a speech during the New York session. The highlights from his speech will show the path of growth for the Euro.

Last Updated: 23/05/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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