July 23, 2021
EUR/USD: The EUR/USD pair showed a bearish dynamic on Thursday, trading in the negative zone near weekly lows and having broken the 1.1770 level after a failed attempt to climb higher. European Central Bank satisfied wide market expectations of keeping the monetary policy unchanged with dovish agenda, suitable to the new inflation targeting method. While this helped the US dollar to recover early Thursday losses, it couldn’t gain much against other currencies than the EUR. President Christine Lagarde added that the economy is on track for strong growth in the third quarter but added also that the coronavirus Delta variant could make the recovery progress weaker in services and ECB doesn’t share the point of view that it may be time to start reducing asset purchases.
AUD/USD: AUD/USD is trading around 0.7380, recovering from it’s annual lows for the third day in a row on Friday morning. Despite the US dollar pullback and optimism in the markets which helped the Aussie to gain the most among other main currencies, it stays on its way to show a fourth weekly loss amid the coronavirus concerns. Australia posting largest daily infections since September 2020 and a surprise spike in the US Jobless Claims seem to challenge the traders’ sentiment. Looking forward, PMI data for July will be the immediate catalysts for Australian dollar ahead of the US initial activity data for the same month. It worth noting that RBA Governor Philip Lowe had to deliver a speech yesterday, but the event was postponed by the organizers, due to the covid outbreak to unspecified time and hence it becomes a surprise. Even so, bears still dominate the market as the Delta covid variant has started increasing the death rate.
Gold: Gold struggled to recover its bullish momentum and showed a mixed dynamic, having closed in the red zone on Wednesday and gained yesterday. Earlier in the day, the market uptrend caused by the strong gains witnessed in major European equity indexes, made it difficult for the precious metal to find demand. Nevertheless, the broadly USD weakness allowed gold traders to limit their losses. Looking forward, market players will pay their attention to the first readings of July’s activity numbers from the UK, the US and the European Union. Although it won’t be a big surprise if the readings turn out worse than expected, due to the virus resurgence, any strong positive beat will be welcomed by the gold bulls.