The euro managed to strengthen its position in tandem with the US dollar after positive data on business sentiment in Germany, which began to gradually improve in March of this year after more than six months of deterioration.
According to the Ifo research institute, the German business sentiment index in March 2019 was 99.6 points against the February figure of 98.7 points. The data significantly exceeded the forecast of economists, who expected the index to be 98.3 points.
The index was well supported by investors' expectations, while the business climate index for the manufacturing sector continued to decline. Ifo noted that the prospects for the production sphere in March were estimated to be more pessimistic.
Considering that the release of more important fundamental statistics is no longer provided today, traders are closely watching the speeches of representatives of the Federal Reserve System.
Charles Evans said that the Fed's interest rates may rise, fall or remain unchanged today. Hence, caution on the part of the Fed seems justified and the policy now comes down to risk management.
The head of the Federal Reserve Bank of Chicago also noted that the Fed's policy will depend on the data, as downside risks are now felt more than positive. Evans predicts GDP growth of 1.75% -2% in 2019 due to the fact that fundamental US macroeconomic indicators remain good.
An interview with Federal Reserve Bank of Philadelphia Patrick Harker also took place today, who said that the outlook for the US economy is still quite good, but the balance of risks is a bit biased in a negative way.
Harker predicts one rate hike in 2019 and another one in 2020. Let me remind you that in the last meeting of the committee, they said that they did not plan to raise interest rates this year. The representative of the Fed predicts that US GDP growth will slightly exceed 2% in 2019 and slow down in 2020.
As for the technical picture of the EUR/USD pair, it remained unchanged. The trading instrument keeps the intermediate level of 1.1295 from further falling, a breakthrough of which will increase the pressure on risky assets. At the same time, it will lead to the updating of last week's lows in the areas of 1.1270 and 1.1225. With an upward correction, the growth of the euro was already limited by the level of 1.1330. However, a repeated test may lead to a larger upward movement in the area of resistance 1.1355.
The material has been provided by InstaForex Company - www.instaforex.com