Despite the fact that stock indices in the US closed in the red zone again (declining for five consecutive days for the first time since February), the negativity did not spread to the Asian markets. Commodities show good dynamics, copper added + 3.93% on Friday, aluminum gained 2.98%, and oil also did so by 2%. This means that the demand for risk remains stable.

At the same time, American producer prices showed growth in August slightly higher than forecasted, which adds dynamics to inflationary expectations. This is a weak bullish signal for the US dollar, as rising inflation in any form is considered one of the signs of an overheating economy, which increases pressure on the Fed.

The yield of 10-year UST slightly increased after the publication of the data, but in any case, it is necessary to wait for data on consumer inflation, which will be published on Tuesday.

The overall positioning on the US dollar remained practically unchanged over the reporting week. The total long position declined by 560 million, namely to 11.1 billion. The largest contribution was made by the euro's growth, which has a chance for an upward correction. In general, sales continued in most commodity currencies.

It can be assumed that the following week is unlikely to lead to strong movements, as players will expect the results of the FOMC meeting. We expect mainly range trading. The US dollar will not show signs of weakness before the FOMC formulates new benchmarks.

EUR/USD

Traders continue to assess the results of the ECB meeting last week, while these estimates are quite contradictory. On the one hand, the ECB started to wind down the QE program earlier than the Fed, which is a hawkish signal. On the other hand, the price pressure in the eurozone is weaker, and the ECB's balance sheet grew faster, so the ECB's steps do not need to be overestimated. In any case, all the main decisions will be made on December 16, that is, the focus on the Fed has not disappeared anywhere.

Over the reporting week, the euro's net long position rose by 2.347 billion, which partially offset the sell-off of the previous two weeks and gives the euro a chance for corrective growth. The settlement price sharply increased since other components of the settlement price also contributed to the euro. First of all, the dynamics of the spread of government bond yields.

It is assumed that the euro has a good chance to stay above the support level of 1.1750, where the base for a corrective upward impulse may form. The target is a local high of 1.1910. An attempt to break through it on September 3 was unsuccessful, but the market situation looks like a second attempt is becoming quite likely. It is difficult to guess whether it will be successful or not now since the overall market dynamics remain in favor of the US dollar.

GBP/USD

On Friday, data on the trade balance and industrial production in the UK for July were published. Despite the fact that the overall final figures were not bad, the forecasts still suggested more positive data. The NIESR Institute, estimating the GDP growth rate in August, noted that the growth of 0.1% is the lowest since January.

NIESR notes that the slowdown in growth is associated with both the end of the spring boom and the onset of the delta strain. It said that there are noticeable risks of a slowdown in the coming months.

Unlike the euro, the pound is less likely to resume growth. The CFTC report showed further growth in the short position, the weekly change of 832 million, and the overall preponderance of bears reached -2.113 billion, that is, the overall positioning in favor of the US dollar remains. At first glance, the estimated price is growing, but this is largely due to the weak dynamics of UST yields, which were stuck near the levels reached in July after Powell's comments in Jackson Hole.

It can be assumed that the chances of going above the resistance zone of 1.3880/90 are low, since speculators on futures continue to sell the pound even amid some demand for risk, which indicates its weakness in the long term. Trading in the range of 1.3720-1.3890 looks more likely in anticipation of the results of the Fed meeting next week.