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Euro is Trying to Consolidate Above 1.03

8/12/2022 11:23 AM

The European currency shows ambiguous dynamics, consolidating near 1.0315. The day before, EUR/USD again made attempts to strengthen its positions, approaching the local highs of July 5, updated on Wednesday. The surge of "bullish" sentiment was due to the depreciation of the US currency against the backdrop of the release of optimistic data on consumer inflation. However, the correction of the dollar did not last long, and soon the demand for the asset began to recover, and the quotes were supported by statements by representatives of the US Federal Reserve. In particular, the Chair of the San Francisco Fed, Mary Daly, said that she still expects a 75 basis point increase in interest rates during the September meeting of the regulator.

The pressure on the dollar increased again yesterday after the release of statistics on the Producer Price Index, which in July decreased by 0.5% in monthly terms and added 9.8% in annual terms, which was significantly lower than the market's expectations of an increase in indicators by 0.2% and 10.4% respectively.

Today, investors will pay attention to the July publications on consumer inflation in France and Spain, as well as data on the dynamics of Industrial Production in the euro area.

According to Bloomberg, European industrial enterprises are in a difficult situation after the decision of the authorities to reduce gas imports. Volkswagen AG representatives predict a fall in revenue against the background of regularly rising fuel tariffs and a decrease in car sales (in July, the figure was -20.0%). Now Tesla Inc. has become the market leader in electric vehicles, increasing its presence in Germany by 0.6%. Meanwhile, automotive components manufacturer Continental AG has estimated additional costs for raw materials and energy at 3.5 billion euros. The German government has already received a large number of applications from enterprises asking for exemption from the need to save "blue fuel" due to the difficult economic situation.

Bollinger Bands in D1 chart show moderate growth. The price range is expanding but it fails to conform to the "bullish" activity at the moment. MACD grows, preserving a stable buy signal (located above the signal line). The indicator is also trying to consolidate above the zero level. Stochastic, having approached the level of "80", reversed into a horizontal plane, indicating the risks of the overbought instrument in the ultra-short term.

Resistance levels: 1.0350, 1.0400, 1.0450, 1.0500. | Support levels: 1.0300, 1.0253, 1.0200, 1.0150.

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