On Tuesday, the European currency resumed growth after a weak inflation report in the eurozone. The pressure on the US dollar returned after the release of data on industrial orders in the US, as well as after the speech of Fed Chairman Jerome Powell, who, though not directly spoke about the likelihood of lowering interest rates, did not rule it out completely.

According to the report of the US Department of Commerce, orders for industrial goods in the US in April of this year decreased by 0.8% compared to the previous month and amounted to 499.27 billion dollars. Economists had expected a 1.1% drop from the previous month. However, excluding transport, industrial orders in April increased by 0.3% compared to the previous month. The main decline was due to a sharp reduction in orders for non-defense aircraft and spare parts, where the figure fell immediately to 25.2%.

The indicator of business conditions in the city of New York fell in May, which is a bad signal for the economy. According to the Institute of Supply Management, the ISM-New York in May 2019 dropped to 48.6 points against 77.3 points in April. The index of expectations for six months ahead also fell to 56.3 points against 77.8 points in April.

All the attention of traders in the afternoon was focused on the speech of the head of the Fed. During the conference, which was devoted to the long-term prospects of interest rates, Fed Chairman Jerome Powell said that he was closely watching the effects of the trade conflict on the economy and would act appropriately to maintain economic growth. Thus, Powell hinted that he did not rule out the option of lowering interest rates, although he did not say so directly.

The head of the Fed also expressed concern about the inflationary background. In his opinion, the current inflation has become less sensitive to the growth of demand for labor, and therefore it is necessary to take more seriously the risk of reducing inflation expectations.

Powell also emphasized that the use of low rates to increase inflation could lead to increased imbalances in financial markets.

As for the technical picture of the EURUSD pair, the further growth prospect will directly depend on the resistance level of 1.1275. Only its breakthrough will provide buyers of risky assets with the necessary demand and will lead to the renewal of highs in the areas of 1.1320 and 1.1360. If the bulls once again fail to get beyond the resistance of 1.1275, the pressure on risky assets may increase again in the short term, which will lead to a decrease in the trading instrument in the support area of 1.1230 and 1.1200.