EURUSD LOOKS STRONG AFTER DRAGHI’S SPEECH
The common currency has shown strong growth that started yesterday after the ECB’s President Mario Draghi delivered a speech where traders were given hints concerning possible cuts in the asset purchasing programme this autumn. Additional pressure on the greenback came from the release of the statement by IMF, according to which the GDP growth forecast in the US in 2018 was lowered to 2.1% from the previous figure of 2.5%. The IMF doubts the effectiveness of tax cuts and investments in infrastructure in America, previously declared by Donald Trump. At the same time the report shows that analysts consider the US dollar is overvalued by 10-20%.
The EURUSD broke through the important resistance at 1.1300 and the closest target within the current rising impulse may be 1.1420; after overcoming this level we may see possible growth up to psychologically important level of 1.1500. In case of a price rollback due to correction, EURUSD may return to 1.1300. The recent move was supported by the covering of short positions and the impulse may weaken today. The mood of investors during today’s trading session may be impacted by Mario Draghi’s speech at 13:30 GMT. We may also see an impact from the US trade balance data due at 12:30 GMT.