EUR/USD gains as US Dollar corrects ahead of US NFP

• EUR / USD bounces above 1,1300 while the US dollar retracts before US PNF data for April.
• The HICP in the euro zone shows that inflationary pressures increased at a faster rate than scheduled in April.
• China has shown the opening to discuss bilateral trade with Washington, which raises the overall tone of market risk.

EUR / USD holds initial gains at almost 1,1300 during the European session on Friday. The major currency remains gains at the expense of the US dollar (USD), which corrects despite an increase in hope to alleviate trade tensions between the UNITED STATES (United States) and China. Investors have become more and more confident of a de-escalation in the Sino-US trade war after comments from the Chinese Ministry of Commerce reported their desire to initiate trade discussions with Washington.

China says that the door is open to commercial talks and urged the United States to demonstrate sincerity if it wants to negotiate, Bloomberg reported. From Washington, US President Donald Trump has also expressed his confidence that the United States will conclude an agreement with China. “There is a very good chance that we are going to conclude an agreement, but we will be successful in our conditions,” said Trump in an interview at the town hall in Newsnation on Thursday, adding that the White House can “announce potential trade agreements with South Korea, Japan and India”.

Technically, this scenario is favorable to the US dollar because it decreases fears of a drop in purchasing power of households. Investors provided that US employers would adopt the higher tariffs for customers, which would decrease their spending capacity. However, the USD is negotiated lower than the medium of caution before the United States (United States) (PNF) for April, which will be published at 12:30 p.m. GMT.

Economists expect American employers to hire 130,000 fresh workers, which are significantly less than 228K's March. The unemployment rate is considered stable at 4.2%. Investors will also focus on average hourly data data, a key measurement of wage growth, which should have increased regularly by 0.3% per month. In annual shift, the measurement of wage growth should have increased at a faster rate of 3.9% compared to the previous release of 3.8%

The data on the inflation of the United States will considerably influence the expectations of the market for the announcement of the monetary policy of the Federal Reserve (Fed) at the June meeting. According to the CME Fedwatch tool, there is 58.6% chance that the central bank reduces interest rates in June after having left them unchanged in the range of 4.25% to 4.50% in May.

The EUR / USD increases after the inflation of the euro zone accelerates more than expected in April

• EUR / USD is firmly negotiated near the higher day after the hottest is released as preliminary preliminary Euro zone Harmonized data of the consumer price index (HICP) for April.
• The Eurostat indicated that the Core HICP – which excludes volatile components such as food, energy, alcohol and tobacco – increased at a faster rate by 2.7% compared to 2.5% estimates and the reading of March by 2.4%. During the same period, the HICP title increased regularly by 2.2% over the year, faster than estimates of 2.1%. The month over the month, the title and the Core HICP increased regularly by 0.6% and 1.0%, respectively.
• The impact of hot inflation figures should be limited to the market expectations for the monetary policy prospects of the European Central Bank (ECB), as civil servants are more concerned with the economic slowdown to additional prices imposed by US President Donald Trump. Regarding inflation, most ECB officials seem convinced that he will return to the central bank's objective of 2% this year, which led merchants at a price in a reduction in interest rates of 25 base points (BPS) by the ECB at the June policy meeting.
• Earlier this week, ECB The decision maker and governor of the Finnish central bank, Olli Rehn, supported the need for a new expansion of monetary policy and expressed his concerns about deepening the risk for the inflation of the euro zone by subcontracting the target of the central bank of 2% against Trump prices. Rehn has not excluded the possibility of interest rates sliding below the neutral rate. “We have to analyze all the options with an open mind and not a priori exclusion rate drops below the neutral rate, said Rehn at an event, Reuters reported.

Technical analysis: EUR / USD returns above 1,1300

EUR / USD Returns above the key level of 1,1300 Friday from its lower two weeks of 1.1265 displayed Thursday. The main pair of currencies rebounded after attracting offers near the 20 -day exponential mobile average (EMA) around 1,1260.

The 14-day relative resistance index (RSI) is inside the beach of 40.00-60.00, indicating that the bullish momentum is concluded for the moment. However, the upward bias still prevails.

By raising the eyes, the psychological level of 1,1500 will be the main resistance of the pair. Conversely, the September 25 summit of 1.1214 will be a key support for Euro Bulls.

(This story was corrected on May 2 at 10:16 GMT to say that in the first ball and the first paragraph, that the EUR / USD pair is negotiated nearly 1,1300, and not 1,3300. It was also corrected to say that analysts were waiting for the HICP in the euro zone at 2.1%, not 2.2%.)

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