15May, 2020No Comments|| 2
For the past few days, the USD has been in the spotlight since economic turbulence has made investors possibly itching for a safe haven. Seemingly, the demand for the USD may shoot up if ever the demand for a safe haven increases.
US Retail Sales Data
One of the pushers of USD demand is the upcoming US Retail Sales Data for April. The release of this data may result in risk-off sentiment making the USD a good place to park money. During the weak, the unemployment rate went up while the CPI went down. Both of which aren’t good for the United States. The data that will be released later on in the day will also push price either upward or downward.
However, this turbulence may mean that investors will want a more liquid investment which is the USD. As mentioned earlier, the USD will see more growth once the demand for a safe haven goes up.
USD Versus the EUR
With the USD possibly going to exhibit strength, a currency that we may pair with it is the EUR. The EUR has been on its lows for the past few days with a large shrink in its GDP. In fact, analysts expect the Eurozone GDP to go as low as it did during the 2008 crisis era .
At the same time, policymakers have still not yet come to a complete census on to how to manage the monetary policy so that they can keep their economy afloat.
Because of that, it is possible for the EURUSD to break its major support level as the USD possibly gains strength. Right now, it is playing at around 1.0782 level and just bouncing around. For now, it has not broken out of this resistance but a stimulus may push the EUR down further. Right now the general outlook of the EUR is bearish while we wait for the USD to possibly gain more strength.
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