Euro back at the table

Now that we know again what president Trump thinks about the strength of the greenback it finely coincided with the technical levels which has been established in 2015 and 2016 with the break of the consolidation in 2017.

Now the level has been confirmed with a strong weekly reversal of the USD against Euro. It is interesting how technical levels coincided with the tweet from president Trump.

Any move below the break-out level of 1.13-1.15 would need to be accompanied by some major relative changes in the economic, political or monetary environment. Difficult to say. Foreseeable catalyst could be mid-term election or any unexpected Fed move.

Euro at the Long-term Support

EUR Curncy (Euro Spot) Weekly st 2018-08-30 18-24-34Source: Bloomberg

Weaker Euro supports the European economy and the balance of payments makes any further trade and tariff discussion more difficult. Strong Euro has negative impact on the corporate reporting in Europe. Well flagged over the last two quarters with much weaker results compared to Japanese or US counterparts.

Not easy to see what will drive Euro positive trend in the coming months. Often the market does what it needs to do. With record longs in the US-Dollar and coming trade manoeuvring Euro could just find some unexpected strength.