The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!
Market Wrap: US Dollar Keeps Strengthening
The US dollar keeps strengthening due to the fresh Covid-19 outbreaks in some parts of the world. By the way, the US NFP report will be out already this Friday, and positive expectations are boosting the USD as well. The better the NFP outcome – the more chances the Federal Reserve might start tapering stimulus. US ADP came out better than analysts expected. This report gives an early outlook on US employment, that’s why NFP should be strong as well.
EU inflation came out exactly as forecasted: 1.9%. The number had no impact on the euro as EUR/USD keeps falling due to the strong USD.
EUR/USD has broken through the key support level of 1.1850 and edging lower to the psychological mark of 1.1800. It’s unlikely to break it on the first try, but if it does, the way down the lows of early April at 1.1750 will be clear. The RSI indicator shows that the euro gets closer to the oversold area.
Oil rose ahead of the OPEC+ meeting today. The alliance is expected to increase oil output by 500,000 barrels a day. Besides, a pause in US-Iran nuclear talks drags on, and that pushes oil prices up as well.
XBR/USD is well supported by the 50-period moving average at $74.40. Today, we might expect oil to rally up to the $75.00 resistance level. The price won’t break this threshold on the first try, but when it does, the way up to $75.50 will be open.
Canadian GDP dropped less than anticipated, which is a positive factor for the Canadian dollar. Thus, we might observe the CAD rises against other currencies except for the strong USD. USD/CAD is edging higher despite this positive data. For example, if you open GBP/CAD or CAD/JPY, you’ll see that the CAD is rising.
By the way, there is an interesting situation on the USD/CAD chart. The Cup and Handle pattern has almost occurred. It would be complete when the price reaches the 1.2470 mark. When it breaks this resistance level, it will rally up to the late-April highs of 1.2600. Support levels are the 100-day moving average of 1.2380 and the low of June 25 at 1.2300.
What will happen? The US Q2 Gross Domestic Product will be announced at 15:30 MT time (GMT+3) on Thursday, July 29…
Today the Fed will make a policy statement at 21:00 GMT+3. This event will affect all the currency pairs with the USD and thus almost the all Forex market!
The Reserve Bank of Australia (RBA) will hold a meeting and announce changes to the monetary policy on August 3, at 07:30 MT time (GMT+3).
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.