{"id":132640,"date":"2018-08-27T06:45:35","date_gmt":"2018-08-27T10:45:35","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=132640"},"modified":"2018-08-27T05:25:55","modified_gmt":"2018-08-27T09:25:55","slug":"eurusd-approaching-the-resistance-at-1-1670","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/08\/eurusd-approaching-the-resistance-at-1-1670\/","title":{"rendered":"EURUSD: approaching the resistance at 1.1670"},"content":{"rendered":"
August 27, 2018<\/div>
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By Gabriel Ojimadu, Alpari<\/strong><\/p>\n

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Previous:<\/em><\/strong><\/p>\n

Last week, all the major currencies gained ground against the US dollar except for the yen. The biggest mover was the euro (+1.60%). The Swiss franc rose by 1.22%, the Kiwi dollar by 0.81%, the pound by 0.77%, the loonie by 0.28%, and the Aussie dollar by 0.13%. The yen, on the other hand, shed 0.69% against the dollar.<\/p>\n

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Fig 1. Dynamics of USD exchange rates for the week<\/p>\n

On Friday, trading on the euro closed up. The single currency rose by 110 pips to reach 1.1640. Market participants shorted the dollar in response to Jerome Powell\u2019s speech at the Jackson Hole symposium, having concluded that his performance was too pessimistic.<\/p>\n

Powell stressed the need to continue along the current trajectory of gradual rate hikes in order to protect the economy, control inflation, and maintain a low level of unemployment. Cleveland Fed chief Mester also voiced her support for gradually raising interest rates in the US.<\/p>\n

St. Louis Fed chief Bullard added fuel to the fire after stating that he thought the Fed should stop raising interest rates. He believes that the fallout from Trump\u2019s tax cuts will come to an end next year, which will cause economic growth to slow, which in turn will bring inflation under control.<\/p>

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Another potential negative for the dollar and positive for the euro was the sharp 1.3% rise on the yuan, taking its value up to 6.80. The People\u2019s Bank of China took the unexpected decision to resume using the counter-cyclical factor to support the yuan\u2019s value, which it had suspended in January. Maybe some kind of agreement was reached at the recent talks after all.<\/p>\n

The US and China concluded two days of trade talks last week, in which they exchanged ideas on how to instill trust, balance, and reciprocity in their economic relations. Still, there\u2019s no indication as to whether the parties managed to reach some kind of consensus on how to address their current problems. If Trump proposes imposing further levies on Chinese goods, I think we can safely say that no agreement has yet been reached.<\/p>\n

US data:<\/em><\/strong><\/p>\n

Durable goods orders (Jul): -1.7% (forecast: -0.5%, previous: +0.7%).<\/p>\n

Day\u2019s news (GMT+3):<\/em><\/strong><\/p>\n