14.07.202008:23 Forex Analysis & Reviews: Investors' tiredness from COVID-19 issue supports the euro and pressures the dollar (EUR/USD and GBP/USD pairs have a chance to continue growing, but only in case of strong economic data)

The dollar remains under pressure against major currencies, despite increasing cases and deaths in the United States. On the one hand, the market is simply tired of this endless coronavirus drama, and on the other, it continues to realize that the US economy is slowly recovering, and the corporate reporting season for the second quarter may bring surprises, which in turn can become the basis for a summer rally in the markets stocks.

Important economic data was not published on Monday, so market players focused entirely on the reporting season, which became the basis for the growth in demand for risky assets with the simultaneous sale of protective assets, which include the US dollar.

Today, the attention of the market will be focused on the publication of data on employment in the British economy, on the values of production indicators and their volumes in the same Britain, USA and in the eurozone. In addition, figures on consumer inflation in Germany and the United States will also attract attention. The day will also be full of speeches by Fed members Brainard and Bullard. And, of course, investors will turn their attention to the published values of crude oil and petroleum products from the American Petroleum Institute (API). The presented data on the volume of exports, imports and the trade balance of China turned out to be ambiguous, but logical in the current difficult conditions. The volume of exports and imports grew by 0.5% and 2.7%, respectively, against the expected decline. However, the balance let us down, amounting to only 46.42 billion dollars in June against the forecast of 58.

Positive values of production indicators and economic sentiment indices in the eurozone and in Germany will continue to stimulate investor's interest in buying shares of companies, which in turn will force them to close long positions in the US currency.

But the market will also monitor the situation with the COVID-19 pandemic, not forgetting about the important events of this week, which include the EU summit on the Recovery Fund in the first place. At the moment, this is the most important factor supporting a positive mood in Europe. Along with an increase in demand for risky assets, it supports the single currency exchange rate, and with it the British sterling, which is growing on the hopes of a faster recovery of the British economy and the removal of the main negative for it – the topic of Brexit.

It is likely that amid general positive background, the euro and pound will continue to smoothly pull upwards, and reaching agreements on the Recovery Fund will only consolidate their growth and open the way for them to further increase locally.

Forecast of the day:

The EUR/USD pair is consolidating below 1.1350 in anticipation of the publication of important data on the eurozone and Germany, which will be released today. If they do not turn out to be worse than forecasts, the pair may continue to rise to the level of 1.1420.

The GBP/USD as well as EUR/USD is trading in anticipation of the release of important economic statistics. If they are above forecasts, then the pair will resume an upward trend and rush to the level 1.2700. But, if they are weaker, a breakthrough of the level of 1.2530 and a correction of the price to 1.2485 are expected.