empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

09.07.202008:09 Forex Analysis & Reviews: Markets hope that the conflict about the Recovery Fund will be overcome (future growth of EUR/USD and GBP/USD pairs is expected)

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

On Wednesday, the attention of the market shifted from the impact of the coronavirus pandemic on the positive aspects associated with the recovery of the global economy.

If the US stock market somewhat revived on Wednesday, despite the increase in the number of cases in America, Europe has remained in the negative zone in the wake of skepticism about the success of the agreements on the European Recovery Fund. The meeting is expected to take place on July 18.

The existing conflict between countries regarding the issue of operation of this Fund shows that the existing contradictions may simply not allow this idea to be implemented or it will only be partially implemented, which, of course, will be a negativity for the ability of the most affected countries to rise economically from COVID-19. Judging by the statements of various European officials, the tension is only growing. Thus, Lagarde, the ECB President, lowered expectations of a successful agreement by expressing concern and lack of consensus among interested parties.

There has been a process of consolidation of major currencies paired with the dollar in the currency market for the last month. The outbreak of the COVID-19 pandemic in the United States, Brexit's problems in relations between the EU and Great Britain, as well as the continuation of the recovery process of the economies leading from this point of view of the countries. Now, the high probability of the failure of the EU summit to confirm the work of the Recovery Fund, in addition to the multi-directional forces that have been consolidating recently, may again return the main currency pairs to a sideways trend, interrupting the probability of certain trends forming.

The uncertainty factor seems to continue to reign in the markets in the near future. Only the news about the beginning of a really working coronavirus vaccine can radically change the situation. In this case, the balance will begin to tilt towards the factor of restoring economic activity in the world,which will be the strongest signal of the start of a global perspective weakening of the US dollar. In this case, all the reasons that play against it will start to work: the most powerful stimulus programs from the Federal Reserve and the US Treasury, the fall in general interest in the dollar as a safe haven currency, as well as the resumption of demand for company shares.

We believe that during the current month, the current overall market picture will continue with possible local shots of the dollar up or down, primarily on the wave of information leads, and not economic statistics.

Forecast of the day:

The EUR/USD pair broke out of the range 1.1165-1.1350. Investors hope that the issue about the Recovery Fund at the EU summit will still end positively. Price consolidating above the level of 1.1350 will allow it to continue to grow first to 1.1420 and then to 1.1500.

The GBP/USD pair broke out of the range 1.21345-1.2540, thereby opening the way to the levels of 1.2690 and 1.2800.

Exchange Rates 09.07.2020 analysis

Exchange Rates 09.07.2020 analysis

Pati Gani
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off