Euro barely moved at $ 1.1087, while risk-sensitive currencies held firm in hopes of easing trade tensions between the United States and China and resuming global growth. Here is the EURUSD Fundamental Analysis of 26 December, 2019.
26 December, 2019 | AtoZ Markets – After falling from several-month highs, the euro-dollar pair took the price level in the middle of the 10th digit. EURUSD bears could not lower the price below 1.087 (the bottom line of the Bollinger Bands on the daily chart). The bulls are unable to return the pair to their previous positions.
EURUSD Fundamental Analysis – 26 December 2019
In the midst of low liquidity and pre-holiday phlegmatic trading, the pair got stuck in a flat waiting for information drivers. Rare news and rumours close to the market push the price up or down. But in fact, the Forex market has already fallen into the traditional pre-Christmas suspended movement with low volatility.
EURUSD has already managed to update its session (and at the same time weekly) lows on Tuesday, being marked at 1.1069. On the one hand, the buyers took the initiative, and the pair updated the daily high. However, they did not leave the boundaries of the 10th figure. On the other hand, such price fluctuations can be called market noise.
For example, the dollar came under pressure on Monday after the release of surprisingly weak data on growth in durable goods orders. The global indicator collapsed to -2% with a growth forecast of 0.2%. Excluding transportation, the indicator fell to zero. But it was forecast to increase by 1.5% immediately. European statistics hardly supported the euro. The German import price index increased significantly in monthly terms (+ 0.5% instead of the expected increase to 0.1%). However, in annual terms, it remained in the negative zone (but it nevertheless left in the green zone, better than expected).
Reduced Chinese Import Tariffs Supports USD
This indicator is an early signal of changes in inflationary trends. Therefore, its positive momentum prevented the euro from continuing to fall – including against the dollar. Towards the end of yesterday, the dollar received support from China. The Chinese government would reduce import tariffs on a wide range of goods (859 types in total) to from 1 January. That includes certain types of food products, consumer goods and production of spare parts for smartphones.
The market has interpreted Beijing’s actions as a friendly measure from China in the context of recent events. But it has made this decision independently, outside of the trading process.
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