Since the beginning of the week, the US currency (USD) has been getting cheaper. The dollar index (DXY) is down 0.66% to 98.00 points. The dynamics of the greenback is slightly worse against the euro (EUR). EURUSD is growing by 0.71% to 1.18030.
The US dollar has big problems. In 1.5 weeks, he lost 2.53%. The EURUSD pair rose from 1.15130 to 1.18060. And this is not the limit. The double strength of the greenback has been replaced by a double weakness. He got a lot of negative macro statistics. And lost the protective demand for the Middle East de-escalation.
The problems with the US currency began last Tuesday. The market seemed to have a premonition that Donald Trump would not fulfill his ultimatum to destroy the Iranian civilization. And it pulled the EURUSD to the upper limit of the 1.5-month sideways trend of 1.14000-116000.
At the last moment, Washington and Tehran agreed on a two-week truce and weekend talks. EURUSD shot towards 1.17000. Flew out of the sidewall. The demand for protection has dropped. And negative macro statistics have started in the USA.
On Thursday, the final estimate of GDP for the 4th quarter showed a slowdown from 0.7% to 0.4%. On Friday, data for March showed a sharp acceleration in inflation from 2.4% YoY to 3.3% yoy. It couldn’t be worse. On the contrary, the euro received a slight improvement in business activity, and by the end of the week, the differential between currencies decreased significantly. There is a large fundamental space for the EURUSD pair to grow.
The weekend passed quickly. Everyone was following the negotiations in Islamabad. The media came out with headlines about the failure. Since Monday’s opening, EURUSD has fallen by 0.47% to 1.16630. But as it turned out later, it was not a failure, but a pause. And on Monday evening, the news about the second round of negotiations pushed the pair to 1.17650.
On Tuesday, the positive continues. FOX News, citing a White House official, reports signs of an agreement with Iran. The US dollar continues to fall rapidly. A natural question arises — to what levels will it continue?
The statistical projection for 3 months ahead shows the possibility of updating the January high of 1.20810. That’s a little high. But technical constructions adhere to approximately the same version. EURUSD broke through the upper limit of the base target of the growing price model of 1.16300-1.17300. And activated an extreme target of 1.20000-1.21000. Such a move could come as a big surprise to the market.
