Although Trump canceled the meeting with Kim, the leaders of North Korea expressed their readiness to talk at night. This slightly improves the sentiment on the market, primarily allowing the USD/JPY to break the several-day series of falls. The dollar is gaining minimal today for other major currencies, but the only ranges of fluctuations in the group of dollar pairs, whose range today exceeds 30 pips, is USD/JPY struggling to find a bottom before the key support of 108.70. Currently, the rate is at 109.60. EUR/USD stays close to 1.17 and GBP/USD is in the middle of the range marked by Wednesday's well at 1.3305 and yesterday's high at 1.34. AUD/USD falls towards 0.7550. USD/CAD can neither break the resistance level of 1.2925 nor clearly fall from it into the range of fluctuations.
On Wall Street, the session ended up negatively modest, less than 0.5%. Futures on SP500 are around 2738 points, an increase of 0.4%. On the Asian markets, the end of the week is definitely calm: Nikkei 225, Shanghai Composite and Hang Seng are at previous closures. The yield on US 10Y bonds did not manage to stay above 3.0% and is 2.98%.
On Friday 25th of May, the event calendar is again busy in important data releases. Germany will post Ifo Business Climate Index, Ifo Current Assessment and Ifo Expectations sentiment data. The UK will issue Business Investment and GDP data. The US will present Durable Goods Orders and UoM Consumer Sentiment data. Moreover, there are some scheduled speeches from BOE Governor Mark Carney, RBA Assistant Governor Michele Bullock, Member of the Executive Board of the ECB Benoit Coeure, FOMC Member Raphael W. Bostic, Robert Kaplan and Charles Evans.
EUR/USD analysis for 25/05/2018:
The ECB Meeting Minutes from April does not provide new information, except that in June an in-depth analysis of the prospects for price pressure will be made. Policy makers do not believe that the current rebound in inflation has been satisfactory. The outlook for economic growth is also uncertain and the future weakening of demand cannot be ruled out. In conclusion, nothing new here from ECB, move along traders.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The rebounded from the level of 1.1675, but as in the first part of the week, the first resistance was stopped (1.1820 at the time), so now the buyers were unable to cross the area of 1.1750. Nevertheless, the downward trend seems to be losing momentum and the risk of trying to generate an upward revision towards the trend line (around 1.1785) should be assessed as high. Only trend line test and breakthrough of the entire resistance zone of 1.1820-50 would, however, open the way for a return to 1.20 and 200 session moving averages. As long as this does not happen, the mid-term decline to 1.1550 (November's bottom) should be considered as the base scenario. Earlier technical support was at the levels of 1.1675 and 1.1620.
