FX.co ★ The dollar is preparing for a breakthrough

EUR / USD pair

On the first day of the week, the euro worked out the consolidation range 1.1935 - 1.1980 ahead of today's data on the euro area's GDP and retail sales in the U.S. due to the absence of any notable news in the financial world. A smaller surprise may be from the second assessment of the euro area's GDP for the 1st quarter where the consensus forecast assumes the preservation of the initial estimate by 0.4% versus 0.6% in the 4th quarter. The industrial production of the euro area is expected to increase by 0.6% in March, but a good figure in itself is overshadowed by the previous fall of the index by 0.8%, which may not be enough to show investors' optimistic sentiment. The index of sentiment in the business circles of the Eurozone from the ZEW Institute for May is expected to be practically unchanged at 2.0 against 1.9 in April, which is the lowest level since August 2016. The same ZEW indicator for Germany is expected to be at -8, 0 against the previous indicator -8.2, which is the worst indicator since December 2012. The GDP of Germany for the first quarter is projected at 0.4% against 0.6% in the previous period.

Forecasts of the US are more optimistic. Retail sales are expected to grow by 0.4% in April after 0.6% in March. Basic sales, excluding transport, are expected to grow by 0.5%, which is the largest increase in the last 4 months, against 0.2% earlier. Inventories of companies in the March evaluation are expected to increase by 0.2% after the previous indicator by 0.6%. The index of business activity in the housing market from NAHB for May is projected at 70 points against 69 in April and the only index of business activity in the manufacturing sector of New York may show deterioration with the forecast of 15.1 for May against 15.8 in April.

Last night, the U.S. President, Donald Trump, and the Canadian Prime Minister, Justin Trudeau discussed the progress of the NAFTA negotiations. Meanwhile, we are set for a positive outcome and we are waiting for the euro to fall in the range of 1.1820 / 35.