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

15.07.202012:58 Forex Analysis & Reviews: EUR/USD: USD retreating but EUR propped up by hopes

Long-term review
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.

Exchange Rates 15.07.2020 analysis

The single European currency advanced across the board despite worse-than-expected macroeconomic data. The eurozone's industrial production climbed just 12.4% in May whereas analysts had projected more robust expansion to 15%. Germany's coincidence index measuring economic sentiment under the current conditions grew to -83.1 in July from -80.9. Experts had assumed a much better figure of -65.

Judging by the market sentiment, investors pin hopes that the eurozone's economy will be able to revive in the wake of the crisis much faster than other regions. The European countries seem to succeed in stamping out COVID-19.

Germany and France adopted severe lockdown measures. As a result, they tamed the coronavirus all right. The EU economy is on the path to the gradual recovery, experts at State Street comment on the developments.

The euro's broad-based advance pushed the US dollar index to near 95.82, the lowest levels since March.

When it comes to the fight against the pandemic, the US cannot boast that the authorities adopted more efficient counter-measures than in Europe. The thing that confuses the market is a high degree of uncertainty that makes it hard to predict anything, Commerzbank says.

Meanwhile, the US dollar is extending weakness despite upbeat data on the US inflation. Consumer prices in the US rebounded by 0.6% m/m in June to the strongest level in almost 8 years.

EUR/USD is rallying amid hopes that the EU leaders will come to the common denominator at the summit scheduled for Friday this week. The agenda will be devoted to the recovery fund for the worst pandemic-stricken countries.

Germany's Chancellor Angela Merkel is ready for a compromise decision for the sake of this idea. She and France' President Emmanuel Macron came up with the joint proposal to establish a rescue fund worth €750 billion.

At present, the market is less concerned about details, but does care about the EU integrity, Commerzbank noted. Investors are not interested in the divided EU.

Apart from the EU summit, EUR/USD found support from an announcement by US pharmaceutical company Moderna. The firm shared its success in inventing the COVID-19 vaccine.

Since EUR/USD gained momentum, the odds are that the currency pair is set to continue its climb towards a one-year high of 1.1492. Alternatively, the pair could not sustain momentum to break that level. On the whole, EUR/USD is following the steady uptrend as long as it stays firmly above the key support level of 1.1320, UOB strategists reckon.

Viktor Isakov
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