IMF – EUR/USD hits 9-month low – Technical Analysis

IMF - EUR/USD hits 9-month low - Technical Analysis

| Libra recorded worst week in months; UK retail sales fell in July
The pound fell back to a one-month low against the dollar and the euro, with the currency posting its worst week in months, taking investors in safer currencies to avoid global risk. In addition, the pound was subsequently under pressure from UK retail sales, which fell unexpectedly in July. This suggests that at least some consumers may have missed out on shopping to follow England’s run in the Euro 2020 football tournament, or stayed home because of the rise in Covid-19 cases. Retailers reported that the tournament – in which England reached the final – and bad weather kept shoppers away from the store. Sales fell by 2.5% in a series – the biggest drop since January, when the country returned to confinement. This reading was surprisingly negative, as an increase of 0.4% was expected.

In the longer term, EUR/GBP behavior has remained sideways in a wide range since late 2017, with values ​​between £0.83 and £0.95. In the short term, and as mentioned, the pair is flattening, with strong resistance at £0.8725, having already been tested several times. As support, find £0.8540/60 and £0.8470.

| EUR/USD hits 9-month low
The EUR/USD fell back to a nearly nine-month low last week, as a result of a stronger dollar at a time when there are growing fears that a “delta” variant could disrupt the global economic recovery at a time when some Central banks begin preparations for removal. of stimuli. The greenback benefited from its safe haven position, which pushed the EUR/USD pair below $1.17. The highlight of last week was the Fed minutes, which revealed a split among members over “tapering”. Still, members are optimistic about the US economic recovery, even as the “delta” version of Covid-19 has intensified and plans are being drawn up for an eventual end to the QE program, which has just been announced. remains. this year. In the European region, the inflation rate in the eurozone was confirmed in July at 2.2% on an annualized basis. This is the highest reading since October 2018 and is well above the ECB’s target of 2%.

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On a technical level, with losses in recent sessions, EUR/USD presents a more bearish outlook as it traded below the $1.17 support level. Technical indicators, namely MACD, support this perspective. The pair is expected to consolidate below this level and may test $1.16.

| Oil down in May
Oil prices fell more than 6% in the past week, hitting a 3-month low. The worsening of the “delta” version of Covid-19 was the top pressure on raw material prices, which could impact the economic recovery and result in fuel demand. The release of minutes of the July meeting of the US Federal Reserve, which showed that the central bank is likely to withdraw the monetary stimulus sooner, also affected prices. Finally, we highlight the United States, which confirmed that crude inventories fell by 3.23 million barrels last week and gasoline “stocks” rose by 696,000 barrels, the first increase in more than a month. .

Technically, with losses over the past few weeks, crude is once again showing a more bearish outlook in the near term, continuing to test the levels below $65/barrel and following the downtrend line. Technical indicators, namely MACD, support this outlook and a move back towards the next support at $60/barrel is expected in the short/medium term.

| “Delta” version of Covid-19 supports gold prices
A positive change has been registered in the gold prices, though it is not very much, but it has also registered slight volatility. On the one hand, the prospect of the Fed withdrawing stimulus to the economy and the development of the COVID-19 pandemic, especially the delta variant, propelled gold prices, which benefit from a safe haven asset position. However, a strong dollar appreciation throughout the week, which detracts from the attractiveness of gold, limited the crude’s gains.

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Technically, with this week’s consolidation, gold presents a more neutral short-term outlook following support near $1800 an ounce. Technical indicators, namely the MACD, support this outlook, which could indicate that the precious metal may continue to consolidate around this level in the near term.

The technical analysis published here is not, under any circumstances, intended to constitute advice or recommendation for the buying and selling of financial instruments, so the analysts and Jornal de Negocios cannot be held responsible for any loss or damage caused by may result from use. of this information. If you would like to clarify any doubts regarding technical analysis, please contact the IMF or the Jornal de Negócios.

About the author: Sarah Gracie

Sarahis a reporter covering Amazon. She previously covered tech and transportation, and she broke stories on Uber's finances, self-driving car program, and cultural crisis. Before that, she covered cybersecurity in finance. Sarah's work has appeared in The Wall Street Journal, Bloomberg, Politico, and the Houston Chronicle.

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