May 6th, Euro is trying to fight back from 1.20

On Wednesday, May 5, by the end of the day, the EUR / USD pair fell by 0.07% to 1.2004. New Zealander, Australian and pound closed in positive territory. The New Zealander strengthened on labor market data, but was unable to have a positive impact on the entire market. The single currency was under pressure due to the decline in the EUR / GBP cross pair.

On the eve of the American dollar rose in price on the statement of the US Treasury Secretary Janet Yellen in an interview with The Atlantic that it is likely that interest rates will need to be raised to prevent overheating of the American economy. She later said that she was not trying to make predictions about the Fed's policy, much less give recommendations to the Fed. The foreign exchange market stabilized after that.

According to published data from ADP, the number of jobs in the US private sector in April increased by 742 thousand. Companies increased jobs, but the figure was below the forecast of 800 thousand.

A report from the Institute for Supply Management showed that growth in the US services sector unexpectedly slowed in April. The services PMI fell to 62.7 in April after jumping to 63.7 in March (the forecast was 64.3).

Scheduled statistics (GMT +3):

• 10:00 Germany is to publish data on changes in the volume of orders in the industry for March.
• 11:00, the ECB economic bulletin will be released in the eurozone.
• 11:30 the UK is to publish the April Services PMI.
• 12:00 the eurozone will report on the change in the volume of retail trade in March.
• 13:00, the Bank of England will announce a decision on the interest rate and the planned volume of asset purchases.
• 15:30 the United States will present a report on the change in the number of initial applications for unemployment benefits.

Current situation:

The focus of traders' attention is directed to the meeting of the Bank of England, elections in Scotland, as well as Friday's report on the US labor market. It is probably better not to touch the pound until next week in order to avoid sharp multidirectional price fluctuations.

The EUR / USD pair is good for growth. Before important events, you should not expect active purchases. They are possible in one case, if long-term American bonds begin to rise in price. If this happens, then sellers will start closing short positions in the euro, which will give the pair an acceleration.

Buyers need to gain a foothold above 1.2030. And on the way, they will meet many resistance levels: 1.2114 (sma55), 1.2028 (3), 1.2039 (1 and 2). If the yield on US10Y returns to the level of 1.532, then we should expect the euro to recover to 1.2030.

Summary: In Asian trading, the dollar is showing mixed performance against major currencies. The EUR / USD pair is trading in the range of 1.1990-1.2018. Psychological level 1.20 is the key support.

Of the important events for today, it is worth highlighting the meeting of the Bank of England. Also, an important role for the EUR / USD pair is played by the dynamics of the yield on 10-year US government bonds. If the yield on US10Y returns to the level of 1.532, then we should expect the euro to recover to 1.2030.

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