Yesterday, the European currency managed to recover its positions paired with the US dollar on the background of the absence of important fundamental data. The euro could be supported by statements of ECB officials.
In the second half of the day, data showed that the index of optimism among small businesses is weak.
According to the report of the National Federation of Independent Business, the index of optimism in small businesses in the U.S. rose by 0.1 points in August to 105.3 points. Economists had expected the index to drop to 104.8 points. A good indicator for the economy is an increase in the average income of citizens. According to the report, the average household income grew by 3.2% in 2016 compared to 2015, to $59, 039.
Statements made by the US Treasury did not support the US dollar. Mnuchin underlined that the tax rate for companies will be at a competitive level, while not giving the exact figures. According to the Minister of Finance, the new tax bill will be ready this year.
It should be noted that one of Donald Trump's pre-election promises was to formulate a tax legislation to reduce the burden on small and medium-sized businesses, as well as in the profit of enterprises and companies from abroad.
Statements by the vice-president of the Central Bank, Vitor Constancio, supported the euro in the afternoon.
Despite the fact that, in his opinion, the proper degree of soft monetary policy allowed the European Central Bank to achieve its goal, Constancio believes that negative interest rates need to be closely monitored and at the first signs of its negative effect the cost of borrowing needs to be increased.
As for the technical picture of the EURUSD pair, today buyers of risky assets have a real chance to return to monthly highs. To do this, one needs to stabilized at the level of 1.1990, which will open a good opportunity for a more stronger upward movement with the update to 1.2030 and exit to a high of 1.2090, where sellers will try their best to form a double high.
If it does get stronger above 1.1990, and the data on the US producer price index will be even better than economists' forecasts, the demand for the US dollar will again increase significantly, which will lead to a larger downward trend in the support area of 1.1880.
