Market Watch – Thursday August 3nd – Euro slows, Aussie has dropped, and more

Euro slows down after rally. The euro has slowed down after hitting its 2 ½ year high of $1.19105 last night. The euro has lost its support from expectations of changes in European Central Bank policy. The recent build-up of euro bullish bets for a test of the $1.20 level points to the risk of a pull-back.

Dollar index pulls up from 15-month lows. After sliding to 92.548, its weakest level since May 2016 on Wednesday the dollar index rose about 0.1% on Thursday. The dollar is seriously oversold against every other currency and “should” correct.

GBP is steady ahead of the rate decision. Sterling held steady ahead of the Bank of England’s (BoE) interest rate decision due later on Thursday. The pound last changed on Wednesday, it rose to $1.3250, its highest level in nearly 11 months.

Aussie has dropped on Trade Balance report. After the release of data that showed the trade surplus narrowed more than expected in June, largely on account of a 1% drop in the exports, the AUD/USD pair hit a 6-week low of 0.7924.

AUD/USD Technical Levels

A break below 0.7892 [23.6% Fib R of 0.7328-0.8066] would open up downside towards support level 0.7787 and 0.7749. On the higher side, breach of resistance at 0.7963 could yield a revisit to 0.80 and 0.8043.

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