Good data on the US economy managed to support the US dollar, which played the most part of the positions against the euro and the British pound.
According to the report of the Federal Reserve System, consumer lending in the US continued to grow in July. Unsecured consumer lending in the US increased by $ 18.50 billion, while the annual growth in lending amounted to 5.9%. Economists had expected lending growth in July at $ 15.0 billion.
Inventories in the US in July also increased. According to the report, stocks in July this year increased by 0.6% compared with the previous month, while economists expected that stocks will increase by 0.4%.
Some support for the US dollar was provided by Ulyam Dudley. The representative of the Fed said that the US economy is gaining momentum, and the financial conditions are quite favorable. In his opinion, it is still too early to talk about the timing of the next tightening of monetary policy but the prospects for further interest rate hikes remain fairly clear.
To further tighten financial conditions, the Fed needs to get a clearer picture of inflation.
As for reducing the balance, then, according to the representative of the Fed, everything will happen pretty soon.
As for the technical picture of the EUR/USD pair, the inability to grab for a large resistance level of 1.2060, with the update of the annual highs and a quick return to it, indicates a decrease in demand for risky assets. The elections in Germany, which will soon become the main topic of economists and politicians, may also put some pressure on the European currency, which will lead to the formation of a larger downward wave in the trading instrument.
Leaving the EUR/USD pair under the support level of 1.2000 will also be evidence of the formation of a major downward wave. Only a break above 1.2070 will allow large players to return to the market again with the expectation of updating the highs above 1.2160 and 1.2220.
The beginning of the week promises to be fairly calm since only important fundamental statistics will begin to emerge. If the data on industrial production in the euro area, which is expected to show the weakest growth, will coincide with the forecasts of economists, the pressure on the euro will quickly resume, as there is no more fundamental support for the pair at current levels.
Data on foreign trade will also be important for investors. Their analysis is necessary in order to determine how the strengthening of the euro affected exports from the euro area.
