Fundamental analytics

EUR / USD increases pressure on 1.12 level


The EUR / USD pair continues to be under severe pressure from the dollar and is trading around the 1.12 mark.

The demand for the US currency rose sharply after the publication of a report on the US labor market, which affected investors' expectations about the size of a possible reduction in interest rates. Now traders expect a more moderate easing of monetary policy than before. In this vein, speeches by Fed Chairman Jerome Powell and other departmental officials in the coming days, as well as the publication of the minutes of the last FOMC meeting, will be important for the market. Jerome Powell, James Bullard, Raphael Bostic and Randal Quorles are scheduled to speak today.

Economic statistics from the EU and domestic political news continue to exert pressure on the European currency. Investors are now paying the most attention to the German economy, whose growth rate continues to decline. Recent statements by representatives of the ECB also strengthen the sales of the European currency. Recently the representatives of the financial regulator Benoit Kere and Philip Lane signaled a possible easing of monetary policy in the medium term. Experts say that the regulator may reduce the rate by 0.1% at the September meeting, and in December to announce the resumption of the asset purchase program.

Against this background, the dollar, obviously, will retain its dominant position on the market.

On the chart, the currency pair continues to move down, gradually increasing the pressure on the level of 1.1200. So far we have not seen any reaction to this mark, which significantly increases the likelihood of its breakdown and further reduction of quotations to the 1.1130 area.

· Resistance levels: 1.1235, 1.1265, 1.1290.

· Levels support: 1.1200, 1.1175, 1.1130.

The main scenario is a decline to 1.1175 and a correction upwards.

Alternative scenario - consolidation below 1.1175 and decline to 1.1130.

The market remains bearish news background. The chart is also dominated by signals to sell. Therefore, intraday preference is given to short positions that should be looked for at levels 1.1235 and 1.1265


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