The US dollar continues to show positive dynamics relative to the basket of world currencies. Over the past month, the dollar index (#DX) has grown by more than 2% and has reached two-year highs. The Fed, as expected, lowered its key interest rate range by 25 basis points to 2.00-2.25%. At the same time, Fed Chairman, Jerome Powell, did not expect a long series of rate cuts, as announced at a press conference after the Fed meeting.
At the moment, investors have taken a wait-and-see attitude before the publication of the US labor market report for July on Friday, August 2. These statistics may affect the Fed's views concerning the further rate of monetary policy adjustments.
Recent reports from the US were rather optimistic. Preliminary data from ADP indicated an increase in the number of people employed in the nonfarm sector of the country to 156K, which was higher than the forecasted value of 150K. The consumer confidence index increased to 135.7 compared to market expectations at 125.0.
Experts expect mixed data on the labor market: the number of people employed in the US nonfarm sector will slow down to 164,000; the growth of the average hourly earnings and unemployment rate will remain unchanged and count to 0.2% (m/m) and 3.7%, respectively. We recommend paying attention to the difference between the actual and forecasted values.
Let’s consider the current technical pattern on the EUR/USD currency pair
- Support levels: 1.10300, 1.10000
- Resistance levels: 1.10600, 1.11000, 1.11200
- - The price has fixed below 50 MA and 100 MA;
- - The MACD histogram is in the negative zone.
There are aggressive sales on the EUR/USD currency pair. At the moment, the trading instrument is consolidating. The euro is testing annual lows. The local support and resistance levels are 1.10300 and 1.10600, respectively. Indicators point to the power of sellers:
Nevertheless, we recommend opening positions from the key levels.
If statistics from the US turn out to be positive, a further fall in the EUR/USD quotes is expected. The movement is tending to 1.10000-1.09500.
An alternative could be the recovery of the EUR/USD currency pair to 1.11000-1.11200.
Confirmations and entry points to the market should be looked for on lower timeframes. When tracking positions, we recommend using a trailing stop.
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