The Federal Reserve speeds up its quantitative tightening, and this is certainly bullish news for the USD. At the same time, this is a negative factor for the American stocks, which have entered their seasonally worst month.
Weekly Forex Outlook: July 23-27
Let’s start with a look at the economic calendar for the upcoming days. The US dollar needs additional support to stick at high levels, however, this week won’t offer a lot of events for the USD. Core Durable Goods Orders data on Thursday and the Advance GDP figure on Friday may support the USD.
It will be an important week for the euro. The European Central Bank will release the interest rate on Thursday. Although the market doesn’t expect a change in the rate. The speech of Mr. Draghi will have an impact. If the Central Bank gives clues on the soon tapering of the quantitative easing, the euro will appreciate. Otherwise, the euro will weaken.
The Australian dollar is highly volatile because of the trade wars tensions. To gain a foothold it needs positive economic data. CPI and Trimmed Mean CPI figures will be released on Wednesday.
The oil market suffers a lot because of a big amount of negative news. Crude oil inventories data on Wednesday will define the direction of the market. The decline in the data will support oil prices. Otherwise, there are risks of the market’s fall.
It’s time to look at the technical side. The US dollar index has managed to break above the psychological level at $95. So far the index has chances to gain a foothold above this level and move further. Positive economic data will support the rise. The resistance is at $95.50. In case of the weak data, supports are at $95 and $94.50.
The euro is trying to recover and stick above 1.17. The weaker USD will support EUR/USD. Positive comments of the Central Bank on Thursday will pull the pair up as well. Resistances lie at 1.17 and 1.18. If the euro doesn’t find support, the fall below 1.16 is anticipated. MAs warn about the further fall of the pair.
The pound plunged because of weak economic data and the strong USD. GBP/USD has reached lows of September 2017. Only the weakening USD and positive news on the Brexit deal will support the pound. The resistance is at 1.3240. The support lies at 1.2865.
Despite the escalation of the trade wars tensions and the unstable environment in the economic world, the Japanese yen has been suffering. USD/JPY reached the highs of the beginning of January 2018. Moving Averages signal the upward movement. Resistances are at 113 and 113.40. If the USD is weaker, the Japanese yen will have chances to recover. Supports lie at 112 and 111.
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