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Euro Shows Ambiguous Trading Dynamics

8/9/2022 12:07 PM

The European currency shows ambiguous dynamics, consolidating near 1.0200. Market activity remains subdued as investors expect new drivers to move trading instruments.

Today, the macroeconomic calendar from Europe and the US is relatively empty, and noteworthy data will appear only tomorrow, when the July statistics on consumer inflation will be published in Germany, China and the US. Current forecasts suggest a decrease in the US CPI from 9.1% to 8.7%, which is likely to push the US Federal Reserve to raise interest rates by 75 basis points during its meeting in September. Inflation forecasts in Germany are neutral and do not imply any changes in the previous dynamics of 0.9% MoM and 7.5% YoY. Chinese statistics, in turn, may reflect the acceleration of consumer price growth from 0.0% to 0.5% in monthly terms and from 2.5% to 2.9% in annual terms. Additional pressure on the positions of the single currency at the beginning of the week was exerted by data on Sentix Investor Confidence: in August, the indicator rose from –26.4 points to –25.2 points, which turned out to be worse than the expected –24.7 points.

Last Friday, the Council of the European Union approved a resolution to reduce gas consumption by 15% already in the coming winter. In particular, from this August to March 31 next year, as part of the implementation of measures to ensure the uninterrupted supply of "blue fuel" to consumers in the event of problems with supplies from Russia, a savings regime is introduced that will affect households, electricity producers and industry. The adopted document gives the European Commission the right to declare an alarm in the eurozone in the event of a risk of a shortage or a sharp increase in demand.


Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, on the other hand, maintains a moderate downward direction, signaling in favor of the development of corrective decline in the ultra-short term.

Resistance levels: 1.0200, 1.0253, 1.0300, 1.0350. | Support levels: 1.0150, 1.0100, 1.0050, 1.0000.




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