The US dollar goes into a decline following a few weeks of buying, as it ran out of puff this previous week. The Europeans, not to be outdone, fell this week, and the S&P500 is retreating from critical levels.
The Dollar Slows Down After Rate Reduction by People’s Bank of China
The US Dollar started with a fresh high before slowing down after the rate was reduced by China. The upcoming Jackson Hole symposium, on the other hand, will set the tone and should be able to provide indications of USD direction. As a result of the cut-rate by the People’s Bank of China, we have seen a pull back from the USD streaks of previous highs.
A reduction in the loan rates of 1 and 5 years by the PBOC was made to improve economic growth. The news impact last week on UK and European inflation, however, also led to its weakness and the Consumer Price Index rising by 10.1% in July. The Russian announcement on the closure of Nord Stream One at the month’s end gives away inflation in the European and UK markets as prices continue to trade high. EURUSD: EURUSD is likely to find support close to the 1.000 and 1.1800 key zones, respectively, as economists at DBS Bank anticipate price stabilization at these key levels.
The GBPUSD – Strong support level is seen ahead of a price drop in the GBPUSD price. GBP had a sharp decline last week and could drop further in the coming days.
XAUUSD – Gold has smashed through the level of $17449.150. Buy traders can look for a recovery above the $1760.000 key level.
USDJPY – More gains in strength are seen as the price aims to push above the 137.850 critical zone. Following bullish advancement last week, an extension will likely occur to the 137.850 key zone.
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