FX.co ★ EUR/USD

Summing up the past trading week, I would first of all draw attention to the decline in volatility, which has fallen to its lowest level since December. This contrasts with the sharp spike in March that followed the start of the war with Iran. The escalation of tensions in the Middle East is not dominating price formation, as the markets have absorbed the initial shock. The calm environment reinforces the main trend – the active use of carry trade strategies, where profit is extracted from interest rate differentials. As a rule, July is favorable for such operations, but in August, which is just around the corner, a turning point often occurs, when macroeconomic volatility increases, making carry trade positions vulnerable to unexpected news. As for the EUR/USD pair specifically, it ended trading in an extremely sluggish mode, around the H4 Kijun line. During the week it broke through the support level of 1.1412 (Murray 3.8), made a second (or third, depending on interpretation) futile attempt this month to reach the 1.1352 level (Murray 2.8), and produced a false breakout of the resistance level at 1.1474 (Murray 4.8), thereby only emphasizing its unwillingness to embark on a path of productive movement in a defined direction.