Fundamental analysis from New Forex: Europe

Fundamental analysis from New Forex: Europe

Posted on May 17, 2017, 14:49 PM

The shares retreated from a 21-month highs reached in the previous session in connection with political scandals in the United States undermined global risk appetite. Some economists point to the fact that the spread between 10-year bonds of Germany and the United States broke the 200-day moving average pointing to the growth prospects of the single currency on the one hand and the weakness of the American currency against another. The volume of speculative positions in favor of the Euro is growing despite the gossip about the exaggerated growth forecasts for the single currency. At the end of trading pan-European Stoxx 600 slipped on 0.02% to 395.91, the German Dax lost exactly the same to 12804.53 and the French CAC 40 fell on 0.21 to 5400.22. Shares of automakers and tour operators was particularly weak, and the corresponding sub-indices on the Stoxx 600 fell by 0.73% and 0.21%, respectively. The index of investor confidence in the German economy rose from 19.5 in April to 20.6 in may, confounding the consensus forecast of 22.0. The Euro appreciated by 0.95% against the dollar at the level of 1.1078, and many analysts say that the next significant resistance is at the level of 1.1299 if followed by reversal from the highs of April 2015.Quarterly economic growth in the Eurozone , as expected, was confirmed at 0.5% by Eurostat and amounted to 1.7% for a year. This happened amid growing evidence that the positive trade balance reached €23.1 billion in March, exceeding the consensus forecast of €18.7 billion.

NewForex Analyst

Alex Vergunov

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