The euro/dollar pair strengthened during Monday's trading and reached 1.2325 by the end of the session.The pair received support at the beginning of the week thanks to the weak labor market data released on Friday. In addition, the main event is the possible development of a trade war between the US and China.
At the weekend, US President Donald Trump reiterated that countries can reach an agreement without war, but markets suggest the worst option possible. The European currency was received after the speech of the member of the Board of Governors of the ECB Benois Kera. He said that, contrary to low current inflation, the probability of a target level of 2% and the beginning of a buy back of assets in the near future is high.
The opposite position was taken by another representative of the ECB, Peter Prat. According to him, there is a discrepancy between economic growth and inflation, and a significant degree of stimulus for monetary policy remains necessary. The latest economic publications in the Eurozone do not speak of continuing strong growth, so the ECB is likely to have to take this parameter into account.
In my forecast for Tuesday, I expect further growth of the euro/dollar pair to resistance levels of 1.2350, 1.2375 and 1.2400.
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