EUR/USD: Signs of fatigue for the Euro, retreats below 1.1800

Vasilis Tsaprounis Independent Analyst

The single European currency is showing strong signs of fatigue, having temporarily lost its strong upward momentum and is already slightly below the 1.18 level, with the streak of 8 upward sessions in question.

As there are significant hopes that the negotiations between Iran and the United States will have some successful outcome, risk appetite has returned to all markets, something that has strongly supported the European currency in recent days.

The US dollar's characteristic of being a safe haven currency, which had a strong impact on the entire environment of escalation and military operations in the Persian Gulf, has been removed from the agenda and levels close to 1.14 that resulted now seem distant.

The pair has nevertheless remained a familiar trading environment for the past 10 months in a range of approximately 600 basis points between levels 1.14 and 1.20.

The temporary cessation of hostilities and the hope for long-term peace in the Middle East prevented the US dollar from reaching higher levels and levels near one 1,12 which were a significant challenge did not appear on the table.

With calm returning to the markets, it is obvious that macroeconomic data will return to investors' attention and determine the future course of the exchange rate.

Inflationary pressures remain a significant question, especially as long as oil prices remain high.

Most investment houses are avoiding bets on the possibility of a rate cuts in the near future, while a reversal of bets in either direction is a significant possibility.

In such a confusing environment, the scenario of the exchange rate remaining in the known fluctuation range of recent months remains a good possibility.

So I will bring back to my mind the idea of buying the US dollar near the previous highs of recent months at the threshold of the 1,20 level.

Author

Vasilis Tsaprounis

Independent Analyst

Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.

GBP/USD holds above 1.3350 with the 200-day SMA capping gains

The British Pound appreciates against the US Dollar on Tuesday to trim previous losses and return to the 1.3375 area, aiming to retest resistance at the key 200-day Simple Moving Average. This is a popular indicator, which lies a few pips below 1.3400 and has been capping Pound’s recovery over the last two weeks.

EUR/USD consolidates gains above 1.1400

Following an earlier move to multi-day peaks past 1.1460, EUR/USD has now slipped back toward the low 1.1400s as the NA session draws to a close on Tuesday. Declining bets for potential Fed tightening later in the year coupled with poor US CPI data hurt the US Dollar, lending fresh legs to the pair and the broader risk-linked universe. Moving forward, the release of US PPI and Chair Warsh’s second testumony should keep investors entertained on Wednesday.

Gold climbs to near $4,050 on softer US CPI

Gold price rises to around $4,050 during the early Asian session on Wednesday. The precious metal rebounds as softer-than-expected US inflation data boosted hopes of the US Federal ‌Reserve adopting a less hawkish stance.

Bitcoin, crypto market post gains following weaker US inflation reading

The crypto market posted gains on Tuesday following the release of the US Consumer Price Index (CPI) report for June, which showed that inflation cooled below market expectations. According to the US Bureau of Labor Statistics, annual inflation slowed to 3.5% in June from 4.2% in May, marking its first decline in five months and coming in below the consensus forecast of 3.8%.

Fed Chair Warsh reaffirms they will deliver price stability

While testifying on the Semiannual Monetary Policy Report before the US House Financial Services Committee, Fed Chairman Kevin Warsh reiterated that the Fed is making a commitment on price stability and the goal of 2% inflation.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.