Concerns that the tension between the USA and China may increase in global markets continues to suppress the risk appetite in the markets. Especially, the critical discourse of US President Trump against the Chinese President and the fact that he blames China for the coronavirus epidemic causes the concerns in the markets to remain alive. China's National People's Congress has announced that it will introduce a draft resolution in the Hong Kong Special Administrative Region that will allow legislation to strengthen national security in the fight against anti-government groups. After this statement, China is expected to cause a reaction in Hong Kong, which has been the scene of pro-democracy protests for months last year. On the other hand, the slowdown in the rate of increase in the number of Covid-19 cases worldwide and the re-opening of economies helped to increase the lucrative outlook of the indices during the week by triggering some optimism in the markets.
On the Euro Zone side, the 500 billion euro incentive package offered by Germany and France to the European Union added value to the Euro side, while the Manufacturing and Service PMI side announced yesterday in the Euro Zone showed a recovery above expectations. Compound PMI data from Germany rose to 31.4 points in May, with loosening measures to prevent the spread of the Covid-19 outbreak. Despite the recovery in PMI activities, we have seen that the increases in the parity remain limited.
In the USA, the number of people who applied for unemployment benefits in the week ending May 16 reached 2.4 million people. In the US, the second-hand housing sales in April also fell sharply, falling by 17.8 percent since July 2010.
Along with the rising risk factors in the markets, the increase in the demand for the dollar is suppressing the rise in the parity. It is not possible to talk about the positive divergence of the Euro side to exceed 1.09-1.10 band. However, moving prices above 1.10 level in the short term view of the pair may be decisive in terms of triggering the buying potential. In this context, we follow the continuation of the increases in the pair within the framework of the resistance levels of 1.1060 and 1.1180. In a retreat that may occur in the pair, 1,0850 continues to be current as the main support point.