The dollar continues to give European currencies

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The dollar continues to give European currencies and to develop the rise of the yen, frustrated by inaction from the Bank of Japan. The dollar/yen is back above the level of 111.00 and is testing the 20-day moving average in the area of 111.60. And the Euro, meanwhile, rose above 20-DMA, but still confined to 1.1730.
The single currency is reducing the demand for “American”, which is mostly on the defensive since last Friday. Markets do not expect anything sensational from the upcoming U.S. Federal reserve meeting, as the next rate hike is expected in September. For the most part, this meeting may be “passing” if Powell will not surprise investors with a more hawkish rhetoric, able to run the dollar rally.
The Euro received support from data on European inflation, which exceeded forecasts, a basic consumer price index accelerated from 0.9% to 1.1% against a forecast of 1.0%. However, the markets showed no reaction to the report, which was unable to raise expectations regarding the first rate hike of the ECB. This was largely due to weak Eurozone GDP for the second quarter, when the economy slowed down from 2.5% to 2.1% in annual terms.
Before the results of the fed meeting, which will end tomorrow night, the dollar can get stronger, though traders are cautious, wondering what will be the rhetoric of the head of the Federal reserve.
From a technical point of view it is important to keep the Euro above the 1.1680, the loss of which would open the way to 1.1620 and below. The immediate resistance is represented in the area 1.1740-1.1750, which overcome the single currency will not be easy without significant catalysts.
Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS