On Monday the 8th of July, trading on the EURUSD pair closed slightly down. The “Monday vs Friday” scenario didn’t work out. The greenback spent the day trading up against the majors as it enjoyed continued support from Friday’s positive jobs data. Friday’s figured lowered expectations that the Fed will sharply reduce interest rates by 50 base points at the end of July. Yesterday’s movements all took place within Friday’s range, without any breakouts.
Day’s news (GMT 3):
- 15:15 Canada: housing starts (Jun).
- 15:30 Canada: building permits (May).
- 15:45 US: Fed’s Chair Powell speech.
- 17:00 US: JOLTS job openings (May).
- 17:10 US: Fed’s Bullard speech.
- 21:00 US: Fed’s Quarles speech.
- 23:30 US: API weekly crude oil stock (5 Jul).
Expectations of a correction to the balance line failed to materialise. Growth on the pair stalled at 1.1234, with the bulls missing out on their target by 6 pips. It wasn’t reaching the 1.1240 mark itself that was important, but the pair recovering to the balance line.
The pair has been consolidating for 38 hours. All eyes are now on Fed Chair Jerome Powell’s speech scheduled for today. Minutes from the FOMC’s June meeting will be released on Wednesday. Markets aren’t expecting Powell to mention interest rates, but doing so may bring about some sharp fluctuations.
I’m still expecting to see a bounce to the LB, except this time, the following drop could gather momentum and break through the 1.12 support. This week could see trade talks recommence between the US and China. Investors will be paying particular attention to any developments on this front.