The anxiety surrounding the topic of the trade war weakened somewhat, which allowed the improvement of risk appetite and the rebound of stock exchange indices. On the currency market USD is in retreat, but also JPY lost more on the cross with AUD and NZD. The night went out without any data or comments, so the volatility is low.
On Tuesday 27th of March, the event calendar is light in important data releases, but the market participants will keep an eye on CB Consumer Confidence data from the US and Richmond Manufacturing Index.
EUR/USD analysis for 27/03/2018:
Concerns about the escalations of the trade war have weakened, also with the help of signals from China and the US, that the parties are open to reaching a settlement. The Trump administration has asked Beijing to reduce the duties on cars, to allow for the increase of foreign shares in financial companies and the import of semiconductors manufactured in the USA. This is aimed at reducing the US trade deficit with China and avoiding the imposition of duties by the USA.
Confidence in the euro area economy in March weakened stronger than expected, according to the data published a moment ago. The index of confidence in the economy prepared by the EC fell to 112.6 with the forecast of 113.3 and 114.2 in February. Looking at the details, confidence in the industry has receded the most, while consumer and service indicators remained virtually unchanged.
Let's now take a look at the EUR/USD technical picture at the H4 time frame after the data were published. The data have no major impact on the market as the EUR/USD has dropped before the release after making the local top at the level of 1.2477. Currently, the price is trading below the technical resistance at the level of 1.2446 in overbought market conditions. The momentum indicator is still above its fifty level, but it starts to point down as well. The nearest technical support is seen at the level of 1.2388.
