Mid week currency markers review
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USD has turned extremely strong this week. There are global concerns, mostly due to the Delta mutation of the pandemic that has developed a risk-off mood to many investors. The USA records more than 100K new cases every day and investors focus on safer solutions, such as the USD. The economic calendar of the week is relatively poor so far but the important events are yet to come as the Interest Rates and the Monetary Policy decision in Eurozone that will be released tomorrow, is by far the most important event of the week. Also, tomorrow the US President Biden will present a six-pronged strategy intended to fight the spread of the highly contagious coronavirus Delta variant and increase US COVID-19 vaccinations.
EURUSD (current price 1.1816) is very bearish this week. All three days are bearish amid the strength of USD and the hold mode regarding EUR because all the investors await the ECB announcements and the Christine Lagarde Press Conference. Markets do not expect surprises as the loose Monetary Policy is said to be extended but in any case, every word or every clue may cause high volatility and turbulence. The Factory Orders and the Industrial Production in Germany were both above expectations. Also, the YoY European GDP was announced at 14.2% which was surprisingly good. Both these events favored EUR. There’s major support at 1.18 for the bearish direction of the pair,
GBPUSD (current price 1.3760) is bearish this week, having lost about 100 pips compared to the weekly open price. Michael Saunders from the Bank of England said that the UK does not need some loose Monetary Policy anymore and that the Interest Rates should rise during the next year. These statements did not help the sterling though because the strong USD is dominating the pair. In case that the downtrend carries on, there is mild support at 1.3730 and a stronger one at 1.36.
USDJPY (current price 110.24) managed to surpass the milestone price of 110 this week, helped by the strong USD and by the rising bond yields (US 10-year yield opened the week at 1.32 and it is currently at 1.35). Japan’s Q2 2021 GDP rose 0.5% vs 0.4% expected but this fact did not stop the pair from having an extremely bullish day yesterday. Above 110.40 the uptrend may accelerate while the first resistance exists at 110.80.