24.04.201800:06 Forex Analysis & Reviews: Weekly review of EUR / USD as of April 23, 2018

During the whole week, the euro was not bad against the dollar, but on Friday it quickly went down. It's all about the media reports about the plans of the ECB to extend the quantitative easing program. It is expected that the regulator will announce this after the meeting on monetary policy, which will be held on Thursday. The fact that this is how events will develop, indicates inflation, which slowed from 1.4% to 1.3%. At the same time, there was no special reason for the growth of the single European currency, as the US statistics was quite good. In particular, the growth rate of retail sales accelerated from 4.1% to 4.5%, although commercial inventories increased by 0.6%. The growth rate of industrial production slowed from 4.4% to 4.3%, but this was leveled by the data on construction. So, the number of issued construction permits increased by 2.5%, and the construction projects started by 1.9%.

Preliminary data on business activity indices in Europe have already become known, and if the production index has fallen from 56.6 to 56.0, in the services sector it has grown from 54.9 to 55.0. As a result, the composite index remained unchanged. The main event of the week will be the results of the meeting of the ECB Monetary Policy Board. Most market participants are waiting for confirmation of rumors about the extension of the quantitative easing program, which exerts a strong pressure on the single European currency. However, it is worth remembering that quite often rumors spread by the media are not confirmed, and most likely, Mario Draghi will once again make a lengthy speech from which it will be impossible to draw any conclusions. Apparently, this issue will be affected, but with the caveat that if the economic situation deteriorates. Thus, no unambiguous conclusions can be made and investors will again start buying a single European currency.

As for the United States, preliminary data on business activity indices are likely to show an increase in the index in services and a decline in the manufacturing sector. Thus, as in Europe, the composite index should remain unchanged. Sales of housing on the secondary market may increase by 0.2%, while on the primary market it increases by 1.9%. Equally important is the fact that the growth in 1.0% of orders for durable goods is projected. But, despite all this positive, it's too early to rejoice in the dollar, as the first GDP estimate for the first quarter should show a slowdown in economic growth.

It is very likely that market participants' expectations will not be justified, and rumors spread by the media will not be confirmed, so that by the end of the week, the euro / dollar pair will rise to 1.2325. If the market believes that the quantitative easing program will be prolonged, then the euro will have nowhere to fall, since this scenario is already included in the price, so the pair will consolidate at 1.2225.