EURUSD surges 0.8% reaching 1.5 month highs on weakening US dollar📈

The US Dollar weakens today again as investors see the risk of further trade war escalation, which may pressure the US economy - even into recession. Also, markets are more and more aware that even existing tariffs will affect the US economy, potentially bringing a bunch of uncertain effects. In the effect of that, we can see the EURUSD pair surging more than 0.7% today, reaching levels unseen since 22 April. The PMI and US ISM Manufacturing data for May came in weaker than expected (while the Final Manufacturing PMI from Germany came today only slightly weaker than anticipated), with declines in subindexes of new orders and employment. Also, construction spending unexpectedly fell again deeper in May.

Here are the Fed member, Lorie Logan remarks

• When risks change materially, We're positioned to respond.
• We have the time to see how the national policies impact the data.
• The key risk is if higher short-term inflation expectations become entrenched.
• Monetary policy is well positioned to wait and be patient. We're well-positioned to act if risks materialize.
• Market volatility and uncertainty could cause households, and businesses, to pull back.
• If tariffs change inflation expectations, that would be significant.
• Risks are balanced on both sides of the mandate.
• Inflation is still somewhat above target.
• Labor market stable. Despite the uncertainty, the overall economy has been resilient

EURUSD (D1)

Today we can see the EURUSD surging above 1.142, and if the recent history will repeat, we can assume that even 1.17 level cannot be ruled out in the case of bullish breakout pattern. The major support zone is now near 1.13 level, while important resistance level is in the range of 1.145 and 1.15.

Source: xStation5