Macroeconomic data was not released yesterday, and ideally, the market should have just stood still. And that's exactly what happened until the Federal Reserve intervened towards the end of the trading day. The US central bank in the form of Raphael Bostic greatly frightened market participants. The head of the Federal Reserve Bank of Atlanta said that the pace of recovery in economic activity is significantly lower than what the Fed expected, and this could force the US central bank to expand measures to stimulate the economy. But these stimulus measures can only be a reduction in the refinancing rate or a full-fledged quantitative easing. In fact, the Fed has no other options. And given that the refinancing rate is already at zero, turning to the printing press is the only way. This is not pleasing to investors, so the dollar confidently began to lose its positions.
At least some macroeconomic data will be published today. Which should confirm the words of Raphael Bostic. Yes, the number of applications for unemployment benefits should continue to decline. In particular, the number of initial applications from 1,427,000 to 1,380,000, and repeated applications from 19,290,000 to 19,200,000. Given the fact that both indicators are still several times higher than normal values, the rate of decline in the number of requests is very, very low. We can say that there is no dynamics at all. However, do not forget about technical factors, and that the euro has strengthened quite well in a very short time. This means that there is a local overbought that needs to be corrected urgently. These technical factors, along with a decrease in the number of applications for unemployment benefits, even if symbolic, can become a reason for weakening the euro.
Number of repeated applications for unemployment benefits (United States):
From the point of view of technical analysis, we see another surge in speculative positions, on the basis of which the quote managed not only to return to the 1.1350 mark, but also to overcome it locally. In fact, we have a kind of inertial movement that can end as quickly as it appeared on the market. Relative to the key coordinates, it is worth highlighting the 1.1400/1.1440 area, which should be considered as the main resistance in the way of long positions.
Considering the trading chart in general terms (the daily period), an attempt to resume the inertia move from June 26 is recorded, but to confirm this theory, the quote needs to be pinned above the 1.1440 mark.
We can assume that the 1.1400/1.1440 area is already putting pressure on buyers, which as a result may lead to a reverse move in the direction of 1.1300-1.1260.
From the point of view of complex indicator analysis, we see that the indicators of technical instruments on the minute, hour and day periods signal a purchase by consolidating the price above the 1.1350 mark.
