On Tuesday the 31st of July, trading on the euro closed down. In the US session, the dollar recovered its daily losses and moved into positive territory against the majors. It got a boost from positive US data as well as a Bloomberg report. The euro dropped from its high of 1.1748 to 1.1684.
Consumer spending and the consumer confidence index both rose. The Chicago PMI also exceeded market expectations.
The US and China are trying to revive talks in an attempt to alleviate the tensions in their trade relationship. A meeting between representatives of both countries is planned for this week.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart. Source: TradingView
The upper boundary of the range was tested just as I expected. The rate jumped to 1.1748 and returned to the balance line. At the time of writing this review, the euro is trading at 1.1683. My forecast expects the euro to slide further against the dollar to around 1.1640/45.
The centre of attention today will be the FOMC meeting. At 21:00 (GMT+3), the US Fed will announce its decision on interest rates. No one is expecting a hike. There will be no press conference with Jerome Powell to follow. Everyone is anticipating the accompanying statement in order to get an idea of what to expect at the next meeting.
I’m not going to take any notice of today’s PMI data. They tend not to influence the market. The British PMI, however, does have the potential to shake up the GBP pairs. So, keep an eye on the EURGBP pair at 11:30 (GMT+3) today. Hopefully, the EURUSD will drop to 1.1645 ahead of the Fed’s rate statement.