21.07.2021: Wall Street shrugs off fears; USD maintains bullish trend; USD, USD/JPY, AUD/USD
The market is relatively calm this Wednesday. The US dollar index, which measures the strength of the greenback against a basket of six major rivals, broke above new highs. At the same time, the stock market continues to extend losses. Investors are jarred by the spread of a new strain of coronavirus. Would you like to learn more about the current market situation? Then watch our video review until the end!
Today, the strong sell-off of riskier assets has subsided. The US stock market showed signs of steady recovery. Yet, the situation may change drastically. Demand for the US currency remains high, which only indicates a technical upward correction of the equity market. It may also hint at a probable winding down of the bond-buying program that is the main reason for the devaluation of the US currency. It managed to approach three-month highs. The greenback may reach the annual peaks if it gains only 0,5%. The likelihood of such a scenario is rather high. So, the US dollar may rise to 93.5 from 93.1 in the short term.
Yesterday’s rally of the US dollar against the yen was halted by the support level. If the quote falls below this level, then it may undertake a second attempt to break through the level of 109.20. It may try to consolidate below the level in order to decline further. However, there is also an alternative scenario, which suggests an upward movement to the level of 110.56. The situation will clear up soon as Japan has recently published new data.
Although the indicator has increased in comparison with the previous month, the final result was still worse than forecasts. Given the strengthening of the US dollar and weak data on the trade balance, the yen is highly likely to give in to the US currency.
The Australian dollar is slowly declining. The quote has already broken below the previously predicted level of 0.72945. The new target is the 0.72450 level. From this level, the Aussie may reverse upwards amid technical signals.
Australia unveiled a weak retail sales report for May, which showed a decline of 1.8%. This is why there is no doubt, the Aussie is likely to approach the next target level.
Today, the economic calendar is again empty. So, investors are anticipating the European Central Bank meeting scheduled for Thursday. The regulator will announce its decision on the key rate and make hints about future plans concerning asset purchases amid the ongoing pandemic. This is what we will focus on in the near future. Do not miss our new video review in order to stay up to date!
01:53 JAPAN'S TRADE BALANCE
02:29 AUSTRALIA’S RETAIL SALES FOR MAY
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