Volatility is gradually decreasing before an important week, during which elections to the European Parliament will be held. Many experts expect that the major currencies will trade around the current levels, and as the elections are held, the future direction of movement in risky assets will be outlined.
Let me remind you that the elections to the European Parliament will be held in 28 countries — members of the European Union — from May 23 to 26.
The data released on Friday on inflation in the eurozone is expected not to affect the market, as coincided with the forecasts of economists.
According to a statistics agency report, the eurozone CPI in April of this year rose by 0.7% compared with March and by 1.7% per annum, which fully coincided with economists' forecasts. As for core inflation, which does not take into account volatile categories, then prices in the eurozone in April rose immediately by 0.9% compared with March and by 1.3% per annum. The eurozone consumer price index excluding tobacco products in April added 0.7%.
According to the report, there are fewer problems in the eurozone with inflation than in the US, however, given the weak economic growth, the European Central Bank is unlikely to return to talk about changing monetary policy towards its tightening in the first half of this year.
On Friday, a report was also released, which indicated a decline in sales of new cars in the EU in April this year. The demand was mainly provided by the countries of Central Europe.
According to the Association of European car manufacturers, the number of new car registrations in the EU decreased by 0.4% compared with April 2018, to 1.30 million units. Let me remind you that quite recently, the White House administration postponed the final decision on duties on cars for 180 days.
The US data supported the dollar in the second half of the day, as household sentiment rose quite seriously in early May of this year.
According to preliminary data from the University of Michigan, the consumer sentiment index rose to 102.4 points in May 2019 against 97.2 points in April, while economists had expected the index to be 97.0 points in May. The index was mainly supported by the excellent situation in the labor market, where jobs continue to be created and wage growth is observed.
As for the technical picture of the EURUSD pair, the further movement will depend on the parliamentary elections. There is support in the area of 1.1135, below which it will be difficult for the bears to break through from the first rose. As for the upward correction, it will be limited by the resistance of 1.1205, where you can count on a return to the market of sellers of the European currency.
The material has been provided by InstaForex Company - www.instaforex.com