The US dollar strengthened on Tuesday and in the afternoon after the release of optimistic data on US consumer confidence, but the risk of trade agreement disruption between the US and China again made investors pay attention to the assets of the refugee, primarily towards the Japanese yen.
According to the report, US consumer confidence in May this year rose after a slight decline in April.
According to the Conference Board, the US consumer confidence index rose to 128.0 points in May after dropping to 125.6 points in April. Economists also expected that the figure would came at 128.0 points. As the Conference Board experts noted, the consumer confidence levels are quite high from the historical point of view, which will positively affect their costs in the short term.
Production activity in the responsibility zone of the Federal Reserve Bank of Dallas in May had increased. This happened due to growth in production and utilization of production capacities. According to the Federal Reserve Bank of Dallas, the production index in May this year rose to 26.8 points compared to 21.8 points in April. Economists had expected the figure to be 23.2 points.
As for the technical picture of the EUR/USD pair, the main target of the buyers is now the resistance level at 1.1590, on which further upward correction depends, that will lead the trading instrument to larger areas of 1.1690 and 1.1785. In case of another unsuccessful attempt to go beyond the resistance level 1.1590, the pressure on the euro will increase again just like yesterday afternoon. This will return to the market of large sellers expecting the lows of 1.1480 and 1.1410.
Yesterday, it was announced that the trade agreements with China, which were reached after the recent talks, may be violated. The administration of the US President Donald Trump once again took a tough stance towards China, declaring new tariffs on Chinese imports. According to the White House, such steps are necessary in order to prevent Beijing from seizing American technologies.
Most likely, a new list of Chinese goods will be announced on June 15 subject to taxes amounted to 50 billion US dollars. It is also reported that by June 30, the US can announce a number of investment restrictions that will prevent Chinese companies from receiving US technology.
As for the meeting between the leaders of the United States and North Korea, it was reported yesterday that US President Donald Trump will meet with Shinzo Abe on June 4 at the White House. This meeting will take place against the backdrop of preparations for the US summit with North Korea. Also, North Korean representative Kim Yong Chol will meet with US Secretary of State Mike Pompeo this week.
* The presented market analysis is informative and does not constitute a guide to the transaction.
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