After such a strong movement logged on Tuesday, a drop was quite expectable. There were all reasons for that as the commodity market showed a sign of a pullback at the beginning of yesterday's trade. However, at the opening of the US trade, commodity markets resumed falling together with the currency market. Notably, this fall was not caused by the publication of the FOMC meeting minutes.
The market got stuck before the publication. What is more, the document did not contain any new information. In fact, the protocol almost repeated all the information presented by Jerome Powell during the press conference. Of course, there were some details, but the key points were the same.
Notably, the market reacted positively to the US job openings data, which unveiled a rise to 9,209 thousand from 9,193 thousand. Thus, the increase in the number of vacancies is a really good factor amid the recent rise of the unemployment rate. In other words, the unemployment rate may decline in the near future. However, such figures were received due to the review of the previous data, according to which in the previous month, the number of job openings totaled 9,286 thousand.
US JOLTs Job Openings
Meanwhile, traders almost ignored Germany’s 5-year bond auction. The yield on the bonds declined to -0.59% from -0.57%.
The yield may drop only amid mounting demand on the government debt securities. At the same time, demand usually advances because investors do not believe in a rise in the key interest rate. In other words, investors suppose that the ECB will hardly raise the key interest rate and announce the timing of the monetary policy tightening. This means that the US dollar has all the reasons for a further jump. There is no wonder that we did not see any pullback in the currency market yesterday.
Yesterday, the euro/dollar pair locally broke the support level of 1.1800. As a result, the downward movement, which began in early June, continued. From June 1 to July 7, the euro has lost approximately 3.5%.
The market dynamic continues accelerating mainly due to speculators’ activity.
At the moment, we can see stagnation slightly below the key level of 1.1800.
If the quote fixes below 1.1800, it may slide to 1.1700, which acts as a local low of the year. In this case, bears will go on controlling the market.
In terms of complex indicator analysis, we see that technical indicators are still providing sell signals since the price is below the control level.