The EUR/USD pair moves within a corrective trend around 1.0169.
Despite a significant increase in fuel and energy tariffs, the EU economies remain stable, as evidenced by macroeconomic data for the second quarter, published yesterday: gross domestic product (GDP) grew by 0.6% QoQ and by 3.9% YoY in terms of 0.7% and 4.0% predicted but still a positive result. The overall employment rate in the region rose to 163.412M from 162.977M, showing a quarterly increase of 0.3%. However, analysts believe that the economic outlook in the euro area is negative: in the second half of the year, GDP will begin to contract under the pressure of high inflation and disruptions in supply chains, but for now, the European Central Bank (ECB) has enough cushion to raise interest rates in order not to provoke a recession, and this may provide some support for the European currency.
The US currency is held at levels above 106.000 in the USD Index, as investors have gained some confidence in the further actions of the US Federal Reserve. The minutes of the last meeting of the Federal Open Market Committee (FOMC) released yesterday indicate that the agency will continue its hawkish course until inflation returns to its 2.0% target, so a 50.0 base interest rate hike is tentatively scheduled for September. Considering that price growth in July slightly decreased to 8.5% instead of 9.1% earlier, a slowdown in monetary policy tightening can be justified.
The trading instrument moves downwards within the global downward channel, reversing at the resistance line.
Technical indicators maintain a poor sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram forms downward bars, approaching the transition level.
Resistance levels: 1.0260, 1.0408. | Support levels: 1.0116, 0.9957.