Looking at the EURUSD pair chart on the daily volume, we see that last night’s FOMC report shook the dollar index, which the euro skillfully took advantage of and rose from 1.18000 to 1.18800. This can now push EURUSD to test the 1,20000 psychological level again, which matches our daily moving average of MA200. We can say that we have a smaller resistance zone there. It lasted until the end of last month. It pushed the pair down to 1.17500, where we found support on the bottom line of support. By setting the Fibonacci retracement level, we see that the pullback has remained on the front line at 23.6% Fibonacci level at 1.18730. If we expect to continue, we need a break above that level. If the Fibonacci level represents a stronger resistance, we then descend to 1.18000 at the site of the previous consolidation.
Overview of the Eurozone’s Economy
The eurozone’s economic sentiment reached a record high in July. European Commission estimates showed on Thursday. But declining consumer optimism and a slower growth rate could suggest the peak is fast approaching.
The EU executive’s monthly survey which sentiment in one currency bloc of 19 countries rose to 119.0 points in July. This is a record since data began to be collected in 1985, from 117.9 in June, a record for 21 years.
But as the positive impact of reopening economic activities begins to wane. Especially as fears about the Delta coronavirus variant grow, the mood developed more slowly.
“Compared to previous months, the last improvement was much smaller, which indicates that the indicator is approaching its peak,” the European Commission said in a statement.
The rise in mood in July was supported by a new burst of optimism in the manufacturing sector. After reaching a renewed increase, this year reached another all-time high, as factory managers remain quite optimistic.
Confidence has risen to its highest level since August 2007 in the services sector. This was the hardest hit during the pandemic and the largest beneficiary of the current reopening.
But the rise in general sentiment was controlled by a drop in consumer confidence after a five-month rally. This was partly caused by poorer households’ assessments of the future economic situation and big shopping plans and contributed to a slight drop in optimism in the retail sector.
Sales price expectations continued to rise in line with higher inflation forecasts by the end of the year in the euro area.
The GBPUSD Pair Chart Analysis
The GBPUSD pair has managed to climb 400 pips from 1,35700 to the current 1,39700 to reach the psychological 1,4000 for investors in the last ten days. Like the Euro and the Pound, it benefited from the fall in the value of the dollar index. Looking at the chart on the daily time frame, we made a break above the falling resistance line at 1.39000. And now we can expect some pressure as we approach the zone at 1.40000.
Before the US session, we will have the GDP report for the United States for the second quarter, Initial Jobless Claims, and Pending Home Sales. All three very important lives will affect the volatility of the entire market, and this couple, of course. The pound is currently in momentum. But if the news for the Dollar is positive, we can expect this pair to retreat to lower levels of 1.39000 and maybe even 1.38000. Thus, asking for painful support for a new bullish momentum.
Mortgage borrowing in the UK reached a record level in June before lower tariff rates began to decline from July, data from the Bank of England showed on Thursday. Net mortgage borrowing reached a record GBP 17.9 billion in June. Evidence suggests that there has been a shortening of the time between mortgage approval and the lending itself, BoE said. Data on money and credit showed that consumers were willing to take on more debt in June. However, there were signs that the recurrence of virus cases may have caused some caution for consumers, affecting recovery.
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