FX.co ★ Donald Trump continues to strengthen the dollar

EUR / USD

Last Friday, the business activity indicators for the US and the euro area were released and looked slightly more preferable for the dollar, but Donald Trump's announcement of imposing 20% tariffs on European cars since the EU does not cancel its tariffs on American cars, and preferred to close the positions before the weekend. While the European Manufacturing PMI for June fell from 55.5 to 55.0, as expected, and Services PMI increased from 53.8 to 55.0, against the expected decrease to 53.7. The US Manufacturing PMI declined from 56.4 to 54.6, while Services PMI officially declined because the May figure was revised from 55.7 to 56.8, and the June figure was 56.5, versus the forecast of 56.4. All of the largest American banks that took part in the stress tests showed positive results. Now, investors are waiting for them from dividends and a new wave of buyback (redemption of their own shares) which is positive factor for the stock market and the US dollar.

Technically, the price managed to fix itself over the blue line and the Marlin signal line within the positive range of values. To strengthen the corrective growth, the price should be fixed above the new level of 1.1675, then the target 1.1744 will open - the resistance of the upper border of the price channel. To do this, the external situation in the dollar should worsen but today sales of new homes in the US for May are published, the consensus forecast assumes growth to 665 thousand from 662 thousand. In Germany, the sentiment index in business circles Ifo for June is expected to decrease from 102.2 to 101.9.

Taking into account the outgoing data, the price may return to the support of the trend line to the level of 1.1590, which will be followed by a further decline to 1.1510.

* The presented market analysis is informative and does not constitute a guide to the transaction.