The resignation of chief economic advisor to President Trump reactivates concerns about trade wars and restores the risk-off climate to the market. JPY and CHF are getting better, AUD and CAD are doing the worst. The stock market in Asia shines red: Japanese Nikkei225 lost 0.77% today, and Shanghai's main index falls by 0.6%.
On Wednesday 7th of March, the event calendar is busy with important data releases. During the London session, it will be worth to keep an eye on UK Halifax House Price Index data and Eurozone Final GDP data. During the US session, important data to focus on are ADP Non-Farm Employment Change, Trade Balance and Crude Oil Inventories from the US and from Canada: Overnight Rate decision and Bank of Canada Rate Statement. There are two speeches from Fed officials scheduled as well.
EUR/USD analysis for 07/03/2018:
At night, the New York Times reported that chief economic advisor to President Trump Gary Cohn resigned, probably due to the lack of communication with the president on trade issues. Cohn's resignation increases the risk that Trump will continue to push high import duties. Trump's meeting with entrepreneurs was also called off, to which Cohn insisted, which additionally puts out hopes for maintaining a free trade policy. Robert Kaplan from the Fed said that it was too early for the Fed to take into account the effects of any duties. He added, however, that anything that would harm the trade relations with Mexico and Canada would be against the US interest.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. Information from the White House hit the market sentiment. The price has managed to retrace 61% of the last swing down, but the move upward is losing the steam as the market enters the overbought zone. If the level 1.2403 is violated, then the next technical support is seen at the level of 1.2366 (this one hasn't been tested yet).
