Source: Economic Events May 15, 2020 - Admiral Markets' Forex Calendar
The performance of the Euro against the US dollar has surprised us a little over the last few days. It has been stable, with a bullish touch, after the German Constitutional Court ruling on May 5.
A quick recap: the German Constitutional Court ruled on May 5 that some ECB actions in regards to asset purchases regarding the QE are unconstitutional, and thus not valid in Germany since the ECB decisions are not backed by the EU treaty.
While the European Central Bank was quick to react, arguing that it follows decisions taken by the European Court of Justice and not national courts, remaining fully committed to its inflation mandate, the GCC ruling sparked a legal minefield and has to some extent resulted in questions about the future of the eurozone. Particularly after Wednesday's comments from German chancellor Merkel, that the German government will respect the constitutional court's ruling on the ECB.
Technically, the levels to watch in the EUR/USD are currently 1.0630 on the downside and 1.1000 on the upside. Given the performance over the last few days of trading, Short-term traders will potentially find the advantage in EUR/USD on the upside.
A driver back above 1.0900 into the weekly close could be better than expected European GDP data: the EC expects the Eurozone GDP to shrink by 7.7 percent this year, before rebounding by 6.3 percent in 2021, saying the economy will experience a recession of historic proportions due to the coronavirus pandemic.
That in mind, any print for the second first-quarter estimate for 2020 which comes in above the expected -3.8% could be interpreted as at least slightly positive and add further bullish momentum for the Euro:
Source: Admiral Markets MT5 with MT5-SE Add-on EUR/USD Daily chart (between March 15, 2019, to May 14, 2020). Accessed: May 14, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the EUR/USD fell by 10.2%, in 2016, it fell by 3.2%, in 2017, it increased by 13.92%, 2018, it fell by 4.4%, 2019, it fell by 2.2%, meaning that after five years, it was down by 7.3%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.