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EUR/USD: between the support 1.1180 and resistance 1.1230 _20/05/2016

Technical analysis and trading recommendations-

According to the Ministry of Labor on Thursday presented US data, the number of initial claims for benefits in the US Unemployment in the week May 8-14 fell sharply, which is one of the signs of stabilization in the economy and the US labor market.

Last week it was already the 63rd consecutive week when the rate of unemployment on the grant applications remained below 300 000, which is the longest period of such statistics in 1973. The low number of initial claims for unemployment benefits generally corresponds to the acceleration of the pace of hiring.

The text published on Wednesday the Fed's minutes of the meeting held on April 26-27, it follows that a rate hike in June is quite possible. Financial markets have reacted to the publication of a sharp strengthening of the US dollar.

Now Fed officials appear determined to finally convince market participants that rates will be raised in June.

President of the Federal Reserve Bank of New York William Dudley on Thursday during a press conference, said that we can expect a tightening of monetary policy this summer from June to July. According to Dudley, "... the US economy is growing above trend pace, contributing to the improvement of the situation on the labor market and giving confidence that inflation will soon reach the target level of 2%."

Applicants from the Eurozone economic data remain weak.

So, according to data released today chime, German producer prices in April rose for the first time ever and for the year, but this increase was not significant. Producers' prices increased by 0.1% compared to March, but fell by 3.1% compared to the same period last year.

Also Eurostat yesterday presented information according to which the volume of production in the construction sector of the Eurozone in March was (-0.9%) and (-0.5% yoy). All current and last week came from the Eurozone negative or weak macroeconomic indicators.

The ECB's efforts for acceleration of inflation and maintaining economic growth in the euro area does not give the desired results, and the Eurozone seems to have returned to deflation.

Thus, expectations of an increase in interest rates in the US in June, the US dollar continues to strengthen the financial markets, including in the pair EUR / USD up to the Fed meeting on June 14-15.

Friday, 20 May, 2016 / 11:38

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