USD traded at $1.3431 per euro on July 25

Good morning from a sunny Hamburg and welcome to our final Daily FX Report for the week.Fighting subsided in Gaza after Hamas militants said they backed a 24-hour humanitarian truce and President Obama called for a ceasefire but there was no sign of any comprehensive deal to end fighting with Israel. Fierce fighting in eastern Ukraine where a Malaysian airliner was downed further complicated an investigation on Sunday as Europe and the United States prepared economic sanctions on Russia over the conflict.

Anyway, we wish you a successful trading day and a relaxing weekend!

Market Review – Fundamental Perspective

In June the European Central Bank put a stimulus package and it cautioned that the economy would take sme time to respond. For a third month in July the inflation rate remained at 0.5 percent. The unemployment rate remain unchanged at 11.6 percent in June. Investors and policy makers have concerns that annual price gains will not reach the ECB ́s goal of just under 2 percent and may increase calls for futher actions. The Europe Union ́s statistics office is due to release inflation and jobless data on July 31. The European Central Bank predicts the euro-area economy will grow 1 percent this year, 1.7 percent next year and 1.8 percent in 2016. It expects inflation to rise gradually over the next two years to 1.4 percent in 2016. Lending to companies and households, which the ECB has identified as key impediment to the region ́s recovery, hasn’t yet improved. Loans shrank 1.7 percent in June from a year earlier. The USD maintained its biggest weekly advance since March against major currencies. The dollar traded near an eight-month high versus the euro before data this week predicted to show economic growth rebounded last quarter and employers added more than 200,000 jobs for a sixth straight month. The Federal Reserve meets from tomorrow to discuss the pace of interest-rate increase. While Fed Chair Janet Yellen told lawmakers this month that the U.S still needs an accommodative monetary policy, she also said borrowing costs may rise sooner than investors expected. USD traded at $1.3431 per euro on July 25, when it reached $1.3422, the strongest since November 21. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, was little changed at 1,013.95 from last week, when it rose 0.5 percent, the most since the period ending March 21, and touched 1,014.39, the highest since June 18.

Daily Technical Analysis

EURUSD (1 Hour)

USD made a strong recovery through the middle of July. Despite the attempts of the bulls to stabilize the currency pair, after an average of two days the bears took the control again, so the overall trend is bearish. There was an outbreak out of the Bollinger Bands which indicates that a small recovery might be in sight. Still as it is difficult to find a support level a further downward trend is expectable.

Support & Resistance (1 Hour)

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