The current week is moving on so far without any special news or game-changers that could seriously affect the FX markets. The pandemic and the Delta variation are in the center of interest, developing a sour mood with risk-off characteristics that favor low-risk assets, such as USD. The USD Index has three bullish days so far, managing to surpass the price of 93, confirming the above.  The big news of the week starts tomorrow, with the ECB Interest Rates announcement along with the Monetary Policy in Eurozone. No big surprises are expected regarding the Interest Rates, the bond-buying program, and the tolerance to inflation but any statement from Christine Lagarde (at the following Press Conference) may create turbulence and volatility.  The week will close with the PMI announcements on Friday, in Germany/Eurozone/UK/USA that will imprint the global outlook of the markets in the near future.

EURUSD (current price 1.1764) is bearish enough this week, having lost the support of 1.1770 and moving to the major support at 1.17. There is no relevant important news in Germany, France, and the Eurozone so far so all eyes fall on tomorrow’s ECB Interest Rate decision and the Press Conference/Monetary Policy Statement. Given the risk-off mood, created by the Delta variation uncertainty, EURUSD has room to extend its bearish trend, at least to 1.17. This bearish trend is very strong since May 26 as the pair has dropped about 500 pips.

GBPUSD (current price 1.3635) has said goodbye to the major support of 1.3730. The weekly economic calendar in the UK has been empty so far so the pair is moving mostly by the COVID-19 concerns and some complications in Brexit, regarding the EU – UK agreement through North Ireland. Another factor that affected GBP negatively is the fact that Jonathan Haskel (Bank of England) said on Monday that the reduction of stimulus is not the right option currently. The next target for the sellers is the price area of 1.35.

USDJPY (current price 110.28) has managed to exceed the psychological level of 110 again, which seems to be a balanced price area for the pair, during the last few days. The bond yields have shown signs of recovery since yesterday and along with the dollar’s strength, create a bullish background for USDJPY. Japan released June’s inflation at 0.2% which shows that the country is in a growth course, after a deflation period. Also, the Bank of Japan at yesterday’s session announced that it will keep the Monetary Policy unchanged, keeping also a low profile regarding growth. Above 110.70, the pair climb much higher.