Market Watch review.
In today's release, we’ll cover the following topics:
In the first three trading days of this week, we observed a weakening of the US dollar against most currencies. In particular, the British pound sterling against the US dollar has renewed highs since April 2018. Along with it, the Australian and New Zealand dollars showed strong growth, indicating investors' appetite for risk. While the demand for the euro remained very weak until yesterday.
With the opening of the European trading session on Thursday, investor interest in the single currency has increased significantly. This could be due to both a moderate improvement in some macroeconomic indicators that were published at that time, and the speech of the ECB chief economist, who noted the difficulties in the placement of long-term government bonds, thereby confirming the high probability of further growth in their yield.
The increase in demand for EUR supported the quotes of the EUR/USD pair, as a result of which a technically strong resistance level was broken at 1.2175. As a result, the risk of further growth to the maximum of the current year continues to increase. I will also pay attention to the EUR/GBP currency pair, which, having pushed off from the minimum since the beginning of 2020, continues to grow, which is more like a trend change. Therefore, I do not rule out further strengthening of the EUR/GBP pair in the medium term.
Let’s shift to the black gold market. It is important to note the fact that the price of oil continues to rise, despite the fact that according to the published report of the US Department of Energy on changes in oil reserves, black gold reserves increased, which should have reduced oil prices in the short term. I believe that the current growth in oil is due to the general recovery of the US stock market, which is a fairly strong driver for commodity markets.
In conclusion, a few words about the upcoming release of the US Personal Consumption Expenditures data today. An unexpected surpassing of the forecasted values could support the US dollar, keeping it from a more powerful decline. While a disappointing report could put more pressure on the US currency.
Closely monitor the news background and be prepared for all the surprises of the market.