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EURUSD: Good data on the US economy limited the upward potential of the euro

Good data on the US economy limited the upside potential of the euro, which was observed after more than excellent reports in Germany and the eurozone.

According to S&P and Case-Shiller, house price growth in the US slowed down in February 2019.

The national housing price index in February rose by 4% compared with the same period last year, after rising 4.2% in January. Such news is favorable for consumers who buy housing for the first time. Lower prices and lower mortgage rates can stimulate sales in the primary housing market.

It is not surprising that the number of signed contracts for the sale of housing in March increased. According to the National Association of Realtors, the index of signed contracts for the sale of housing in March rose by 3.8% compared with the previous month, reaching 105.8 points. Economists had expected the March index to show an increase of 1.5%. Despite this, compared with March 2018, the index decreased by 1.2%, which is directly related to the growth in mortgage rates over the past year.

Meanwhile, the confidence of American consumers in April of this year has grown, which may also stimulate the economy in the future. According to the Conference Board, the consumer confidence index in April was 129.2 points against 124.2 points in March. Economists had expected the index to be 126 points in April.

Chicago Purchasing Managers' Index (PMI) fell slightly in April. According to MNI Indicators, the index fell to 52.6 points from 58.7 points in March, but remained above the value of 50 points, indicating an increase in activity.

Today, the Federal Reserve is scheduled to publish a decision on interest rates in the United States, as well as a press conference. Many expect the committee to change its tone and signal a likely lowering of rates in the future, if necessary. This is precisely what President Donald Trump has long sought, who yesterday once again appealed to the Federal Reserve to lower the key interest rate by 1 percentage point and resume the crisis program to buy bonds. In his opinion, this will allow us to start once again stimulating the growth of the American economy.


According to the forecasts of economists, the Fed will leave rates unchanged. Let me remind you that back in March of this year, the committee refused to raise interest rates this year and announced plans to stop the reduction of its asset portfolio of $ 3.9 trillion.

As for the technical picture of the EURUSD pair, further growth is limited by the resistance of 1.1235, the breakthrough of which can maintain an upward momentum, which will lead to the updating of large levels of 1.1280 and 1.1330. If the Fed continues to adhere to its interest rate plan, the demand for risky assets will be limited, which will help return the lost positions to the US dollar and will lead the trading instrument to the lows of 1.1170 and 1.1120.

Despite the weak report that the Canadian economy contracted slightly in February, not meeting the expectations of economists, the USDCAD pair also declined. The slowdown in economic growth is directly related to the downturn in the mining sector.

According to the data, gross domestic product in February decreased by 0.1% compared with the previous month and amounted to 1.946 trillion Canadian dollars. Economists had expected GDP to remain unchanged. Compared with the same period last year, Canadian GDP in February increased by 1.1%.

The material has been provided by InstaForex Company -