Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
British pound and euro dive after the release of weak economic reports
On Wednesday, the euro and British pound approached their five month-lows after the disappointing economic reports. The greenback rallied before the publication of the minutes of the last gathering of the key US bank.
The common currency declined to the lowest value for five months after the release of data that in May the surge of business activity in the private sector of the euro area speeded down to a minimum for 18 months.
The Composite Business Activity Index (PMI) from Markit in the euro area, gauging performance in the manufacturing as well as service sectors, dived in May to 54.1 versus the anticipated value of 55.0.
The disappointing report will probably lead to deterioration in the forecasts for further tightening of the ECB's monetary policy.
The euro dived: the currency pair EUR/USD went down 0.48% being worth 1.1724.
The British pound has updated the minimum for five months against the greenback after publishing data that year on year inflation in Great Britain slowed. This reduces the pressure on the Bank of England as for a probable increase in the interest rate.
The currency pair GBP/USD tumbled 0.53% to 1.3362.
The US currency managed to grow to a maximum of five months before the publication of the minutes of the last meeting of the Fed. The Federal Reserve is expected to publish the minutes of the last gathering of the Open Market Committee soon.
Traders will be interested in any information regarding the probable tightening of monetary policy by the US key bank.
The recent surge in the revenue of US bonds, upbeat economic reports as well as the acceleration of inflation have given push to forecasts for a further lift in the Fed's interest rate and tightening of monetary policy.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.