Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Evergreen buck extends losses
On Tuesday, the evergreen buck kept slumping for three sessions in a row because dovish remarks from a Fed representative put downward pressure on the US currency.
Estimating the purchasing potential of the American dollar versus its primary peers the USD index went down by 0.22% ending up with 96.52.
Cleveland Fed President Loretta Mester, traditionally considered to be one of the Fed key hawks, told that she would back decelerating the balance sheet normalization process.
Mester's remarks became part of a wider chorus from the Us major financial institution because recent indications of economic weakness, in particular the most impressive tumble in retail sales for nine years, have mad policymakers reverse their course from a previously more hawkish stance to tightening.
As for currency pairs, the British currency was underpinned by dollar weakness. Notwithstanding minor progress on plans for its escape from the EU, on Wednesday, British Prime Minister Theresa May is anticipated to meet with EU commission president Jean-Claude Juncker against the backdrop of few expectations for any advances, the UK pound derived benefits from a firm employment report uncovered before the American market opens. As a matter of fact, the currency pair GBP/USD managed to surge by up to 0.83% being worth 1.3026.
As for the common currency, it also rallied versus the evergreen buck due to the fact that closely watched indicator of German economic sentiment demonstrated a better-than-anticipated improvement in the mood of eurozone’s leading economy. The currency pair EUR/USD jumped by 0.13% being worth 1.1321.
Dollar weakness also restricted the Japanese yen’s losses notwithstanding remarks overnight from Bank of Japan governor Haruhiko Kuroda. The told that the major bank was geared up towards ramping up stimulus in case the strength of the Japanese yen affected the national economy. The currency pair USD/JPY rallied by 0.08% showing 110.67.
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.