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EUR/USD Pulse Check 18 Apr 19

The EUR/USD has lost the region of 1.13.

1.13 Escapes

Looking at the EUR/USD 60 minutes chart above, we note that the currency pair has lost the region of 1.13 for now. It is now on a sharp dive towards the strong sentiment and support region of 1.12. In our previous EUR/USD Pulse Check, we mentioned that it would be prudent to note that 1.12 may provide a pivotal influence, attempting to shift the price action back to it’s vicinity. As the US market opens and fills the exchange with new liquidity, close monitoring may yield insights to price action. The yellow lines are the possible support and resistance regions in the immediate vicinity. Do note that price action in shorter time frames are often sentimental in nature.

German Manufacturing Drops

The German Manufacturing Purchasing Managers’ Index came in worse than expected. It was reported to be 44.5 instead of 45.2. While it may not seem to be significant, the devil is in the details. A number of below 50 is an indication of contraction. Therefore, 44.5 is a contraction and is worse than expected. Furthermore, the previous release was 44.7 and hence with 44.5 being reported, the situation is that the contraction is escalating, This likely inflicted significant negative sentiment towards the euro currency.

North Korea Flexes

It was reported that North Korea had conducted a tactical weapon test. Furthermore, state media reported that North Korea no longer wants the U.S. Secretary of State Mike Pompeo to be involved in nuclear talks. North Korea want someone who “is more careful and mature in communicating”. Investors are averse to sovereign issues and this being a situation with global implications, likely triggered risk aversion. If indeed, it is not unexpected to see “safe” assets such as the US Dollar to gain in value.

Still to Come

Many important economic events are still to come, including the US Building Permits release. The construction of a building generates many economic activities. Jobs will be created for construction workers, the various sub contractors and services associated with new buildings such as power, water, furniture and so on. Therefore, investors and analysts will be paying attention to the result. It is important to follow an economic calendar so that you can reduce the possibility of an unexpected development affecting your trading plan. Members can log in to their dashboards for an economic calendar. Always plan your trades with proper money management.

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