Following the two-day talks, the United States and China did not reach a trade agreement. Immediately after this, US President Donald Trump stated that the United States and China had direct and constructive discussions on the status of their trade relations, but whether the duties would be retained or abolished depends on what happens next during the negotiations with China.
Let me remind you that on Friday, US President Donald Trump's decision to increase duties on Chinese imports came into force, to which authorities in China reacted very harshly, but have not yet resorted to retaliatory measures.
With regard to the fundamental statistics, which was released on Friday, the report on inflation in the United States did not provice a strong support for the US dollar, as prices continued to rise mainly due to higher energy resources.
According to the US Department of Labor, CPI in the United States in April this year rose by 0.3% compared with the previous month. The base consumer price index, which does not take into account the volatile categories, increased by only 0.1% compared with the previous month. Economists had expected the overall index to show an increase of 0.4%, while the base index would rise by 0.2%. Compared with the same period of the previous year, consumer prices rose by 2.0%, and the basic index immediately by 2.1%. Economists had forecast that both the general and the base indices would show an annual growth of 2.1%.
As I noted above, the main growth occurred at the expense of energy. For example, gasoline prices reached $2.8 per gallon in April against $2.52 in March. In general, energy prices in the United States added 2.9% in April compared with the previous month.
On Friday afternoon, Fed representatives also gave speeches, as they continue to talk about inflation. President of the Federal Reserve Bank of New York, John Williams, said that the US economy remains on the path of healthy growth, and the labor market is strong. Despite the fact that inflationary pressure is restrained, the weakness of inflation will be temporary, since the basic inflationary pressure is closer to the target level of the Fed.
Williams also expects a slowdown in GDP growth to 2.25% in 2019, while the short-term risks for economic growth, in his opinion, have slightly decreased. Regardless, trade conflicts and Brexit are still a serious problem for the global economy.
As for the technical picture of the EURUSD pair, further movement will depend on whether buyers of risky assets can cope with the resistance level of 1.1240, a breakthrough of which will increase the demand for the trading tool and lead to new weekly highs in the 1.1270 and 1.1300 area. The downward correction may be limited by the support of 1.1200 and a larger level of 1.1170.
The USDCAD pair tumbled after the publication of a report that employment growth in Canada sharply increased in March of this year. According to official data, the net number of jobs in Canada rose by 106,500 in April, while economists had expected growth of only 15,000. The unemployment rate in Canada was 5.7% in April against 5.8% in March.
The material has been provided by InstaForex Company - www.instaforex.com