During Europe’s trading, the US dollar index (DXY) traded in a sideways trend between 93.81 and 94.09. At the last hour, it hit a new low of 93.68. The dollar has fallen against all major currencies except for the yen. It’s currently under pressure due to the looming Fed meeting tomorrow.
The single currency made some ground against the greenback during the Asian session while Yves Mersch was speaking. During the European session, the euro was provided with some support by the German IFO report, which shows an increase in business activity in July. After an unsuccessful attempt at returning to 1.1624, the pair restored to 1.1699.
Next, we need to see how sellers are going to defend 1.17. If they give it up without a fight, and given that the Fed is not going to raise interest rates, then the growth in quotes will continue to 1.1740. Once they reach this point, buyers will have new opportunities open to them, and will have their sights set on 1.2185.
If the euro/pound cross doesn’t interfere, and sellers manage to push buyers back at least as far as 1.1655, then in that case, we might see a double top form by way of a reversal model. There are no guarantees, however, that that would work. Everything looks good on the technical side of things. A real breakout of the 1.1618 support is needed, but there are no drivers for it.
In the CBI industrial trends survey, orders rose by 10% (forecast: 11%, previous reading: 16%).
The IFO business climate index came to 116.0 points (forecast: 114.9, previous reading: 115.2).