Powell said yesterday about the same thing as on Wednesday, but this time the market believed him more, and the dollar went on a confident offensive this morning, continuing yesterday's still modest growth.
The euro is actively decreasing today both in the main cross-pairs and against the dollar. Published this morning, macro data for Germany and the Eurozone pointed to a continuing decline in business activity.
However, given the medium-term uptrend of EUR/USD, the decline should be assessed as corrective for now, providing an opportunity to enter new long positions with the prospect of growth towards the resistance level 1.1570.
Thus - buying from the levels 1.0845, 1.0850. The breakout of the resistance level 1.0900 (EMA200 on the 1-hour chart) will strengthen the positive dynamics of EUR/USD, and the breakout of the resistance levels 1.0945 (EMA144 on the weekly chart), 1.0985 will confirm our assumption.
Today, the focus of investors will be macro statistics on business activity in the manufacturing and service sectors of the American economy.
Preliminary PMIs (from S&P Global) are expected to show moderate growth in June in the manufacturing sector and the composite indicator (48.5 and 54.4 vs. 48.4 and 54.3, respectively), while PMI in the sector services decreased slightly (to 54.0 from 54.9 in May), while remaining above the value of 50, which separates the growth of activity from the slowdown. In May, manufacturing PMI fell for the first time this year, suggesting that a prolonged cycle of rising interest rates (read: the cost of borrowing for businesses) is already hurting businesses, pushing the economy into recession.
If the data on business activity in the US turns out to be better than the forecast, this will increase the likelihood of another Fed rate hike, which will positively affect the dollar (markets are now pricing in a 77% chance of a Fed rate hike in July).
However, the PMI data worse than the forecast will say about the strengthening of economic problems in the US. This is a negative factor for the dollar.
Support levels: 1.0845, 1.0800, 1.0745, 1.0710, 1.0685, 1.0600, 1.0520, 1.0500.
Resistance levels: 1.0900, 1.0945, 1.0985, 1.1000, 1.1070, 1.1100.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
AUD/USD languishes near multi-year low after RBA meeting minutes
AUD/USD remains depressed after the December RBA meeting minutes reiterated that upside inflation risks had diminished, which reaffirms bets for a rate cut in early 2025. This, along with concerns about China's fragile economic recovery and US-China trade war, undermines the Aussie and weighs on the currency pair.
USD/JPY sticks to positive bias after BoJ meeting minutes
USD/JPY holds steady above the 157.00 mark and moves little following the release of the October BoJ meeting minutes, emphasising a cautious approach to monetary policy amid domestic and global uncertainties. Adding to this, doubts over when the BoJ will hike interest rates again, which, along with a positive risk tone, undermines the safe-haven JPY.
Gold flat lines above $2,600 ahead of holiday trading week
Gold price trades flat around $2,610 during the early Asian session on Tuesday. Markets face a relatively quiet trading session ahead of the holiday trading week. The US Richmond Fed Manufacturing Index for December is due later on Tuesday.
Ethereum risks a decline to $3,000 as investors realize increased profits and losses
Ethereum is up 4% on Monday despite increased selling pressure across long-term and short-term holders in the past two days. If whales fail to maintain their recent buy-the-dip attitude, ETH risks a decline below $3,000.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.