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EURUSD forecast for 23.06.2020

June 23, 2020

June 23, 2020

Dollar: the devil is in the detailsDmitri Demidenko

The White House doesn’t plan a deep correction of the S&P 500

The business won’t go on well without the agreement among the businessmen. White House trade advisor Peter Navarro said the US trade deal with China is “over”, which has shaken financial markets. The S&P 500 has been down, which is not what the US administration wanted. Both the trade advisor, who said his words were taken out of context, and Donald Trump had to make excuses. The US President tweeted that the China trade deal is fully intact. It seems to be a minor episode, but the devil is always in the details. Trump will do his best to avert the crash of the US stock indexes, and so, the [EUR/USD][1] bulls could go ahead.

The second wave of the pandemic and the escalation of the trade war are the factors that can weigh on the S&P 500. Despite the record number of coronavirus cases in some US states and the world, serious problems because of the coronavirus in Basil, financial markets still hope for a soon victory over the pandemic. The news about coronavirus vaccine and cure gives the global stock market optimism. As for trade wars, Robert Lighthizer said the parties are willing to meet their obligations under the agreement on time. Furthermore, Beijing is willing to increase purchases of US agricultural products and to fulfill its promise to buy an additional $200 billion in American goods and services over the next two years. This should have reassured investors. However, one wrong phrase by Peter Navarro has caused much stress.

Remarkably, China didn’t feature a lively response to Trump’s attacks, including the threats to break all the relations. According to the US former national security adviser John Bolton, Beijing wants Trump to be re-elected as the US president. Why should China want this? Trump threatens with new tariffs and blames China for the coronavirus pandemic. This may be because Trump does more harm to the USA than to China. By the way, China’s economy, according to Bloomberg’s experts, will avert the recession and should be growing faster than it was earlier expected. China’s GDP should be up by 1.5% in the second quarter and by 1.8% in 2020. In May, it was expected to be 1.2% and 1.7%.

Good news from China should support the export-led economy of euro-area, as well as the euro. Moreover, the ECB is not willing to openly confront Germany’s Constitutional Court, which required the €2.5 trillion QE to be justified by an independent organization. According to Christine Lagarde, the European central bank does this at each meeting.

Dynamics of European QE

![LiteForex: EURUSD forecast for 23.06.2020][2]

Source: Bloomberg

The [EUR/USD][1] bulls expect that the minutes of the June meeting of the Governing Council should express a more conciliatory position. Remember, the ECB decided to boost the QE size by €600 billion at the last meeting. The euro will also be supported by a strong reading of the euro-area PMI. According to Bloomberg forecasts, both the manufacturing PMI and services PMI should continue growing after reaching the low in April. Strong PMI data could push the euro up to the resistance at $1.1280-$1.1285.

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Price chart of EURUSD in real time mode

![Dollar: the devil is in the details][5]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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