Euro analysis ,May 3
Is the downward correction of the euro temporary?
There are positive signs of a rapid recovery in the global economy. The global economy is compensating for the recession caused by the Corona crisis. This means that demand for the US dollar (safe haven) will decrease and risky assets such as the euro and commodity currencies will strengthen.
Last week, US economic data showed rapid growth of 6.4 percent in the first quarter of 2021. April US data also showed good US economic growth. Eurozone economic indicators are also promising, and German inflation has strengthened. All this news is in favor of the EURUSD currency pair. However, the market may need a break to continue the bullish EURUSD rally. Following the bearish correction, the euro is expected to climb again to the $ 1.22 trend level and the February 25 high around $ 1.2250.
Next week, the market will focus on UK and US economic data. This means that the euro will be more affected by fluctuations in the EURGBP and EURUSD. The Bank of England and US NFP data will be released this week. It is also necessary to pay attention to the final report of the PMI and retail zones of the euro area and the industrial production index.