The US dollar continues to be in demand, as lack of important fundamental data and the upcoming meeting of the European Central bank are forcing investors to refrain from buying risky assets.
Yesterday afternoon, data on the number of housing starts in the United States was released which supported the US dollar.
According to a report by the US Department of Commerce, the number of housing starts increased 8.3% in June compared with the previous month and reached a total of 1.215 million homes per year. The number of building permits rose by 7.4% to 1.254 million homes.
Economists forecasted an increase in the number of housing starts by 6.4% and a rise in the number of building permits by 2.6%.
Other significant data has not been released, which led the EURUSD to trade in a narrow sideways channel.
In regards to the technical picture of the pair, much of today will depend on the statements of European Central Bank President Mario Draghi.
Many traders are waiting for clues from the European Central Bank on the outlook for its stimulus programme. If in the course of today's speech the European Central Bank will signal its readiness to tighten monetary policy stance, then the demand for the euro will sharply resume, which will then lead to the renewal of new weekly and monthly highs in the resistance level of 1.1600 and 1.1690. The sharp rise of the euro in the 1.1565 region during Mario Draghi's speech may be a good signal to raise long positions that have been located above a number of stop orders, on which the midterm upward trend in the euro will be renewed.
It will be important to have statements about how the bank intends to act after December 2017, which is when the current quantitative easing program should be completed. Details on the curtailment of the program are very important for the exchange rate of the euro, along with prospects for raising interest rates in the eurozone.
If today Draghi reiterates that the ECB leaders have not yet discussed reducing the volume of bond purchases, and that the policy will change gradually, all tied to the level of inflation and rate of economic growth, then the pressure on the euro may rise significantly.n of a larger downward correction in the trading instrument with a decline in the support level of 1.1470 and 1.1440 in the short term.
