Analysis EUR/USD. The Euro is ready to reach stability

eu-l9The major currency pair stopped falling on Friday and started a correction.

After serious fluctuations earlier this week, EURUSD is looking neutral on Friday morning. The current quote for the instrument is 1.1289.

There was a lot of news from the USA today. For example, the House of Representatives of the US Congress passed the budget act, so it seems that the longest Government Shutdown in the American history is almost over and it doesn’t make investors nervous anymore. Before that, the budget was approved by the Senate and now it has to be signed by the US President Donald Trump. However, the story of the fight between the White House and the Congress if not over. On the sidelines, the rumor has it that Trump is going to sign the document and then declare a state of emergency on the Mexican border, thus pursuing his previous agenda. Trump needs it to wheedle more money out of the Congress for building the wall on the border between the USA and Mexico in order to decrease the number of migrant. The Congress approved 1.4B USD for this purpose, while Trump requires 5.7B.

It’s quite clear that the Congress will not budge, because there is nowhere where it can get this extra money. Most likely, the emergency state might be followed by a series of court proceedings. However, this whole story is a nice support for the USD, because investors will surely require “safe haven” assets when policymakers “fishtail”.

The numbers that are worth paying attention to today are the Industrial Production that is expected to expand by 0.1% m/m in January after adding 0.3% m/m the month before, the Capacity Utilization Rate that has been slowly growing since December 2016 (the highest was November 2014, 80.1%) and is expected to be 78.8%.

The USD may get more support from the preliminary February report on the Consumer Sentiment from University of Michigan, which is expected to rise up to 93.3 points after being 91.2 points the month before. In this case, the tendency is rising and pretty stable. The bigger the reading, the better for the USD.

Orgin: RoboForex

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