EUR/USD Rebounds, CAD/JPY Prepares to Break Out, USD/PLN Tumbles: What's Next?
Following Federal Reserve Chairman Jerome Powell's speech last week that didn't provide any clues regarding monetary policy, investors shifted their focus to macroeconomic indicators.
Yesterday's GDP, GDP price index, and ADP non-farm employment data came in lower than expected and the US dollar tumbled in response. This somewhat lowered the probability of another interest rate hike.
Source: Investing.com
Looking at the macroeconomic calendar, it's important to highlight the persistently high levels of inflation in Germany.
Although its downward momentum has slowed, the inflation rate remains consistently above 6% year-on-year. If similar data emerges for the entire eurozone, it could send a strong signal on the EUR/USD currency pair.
The EUR/USD pair has declined for over a month, but that indicates a correction rather than a new downward impulse. Towards the end of the previous week, sellers approached the correction zone, situated around the price level of 1.0770.
The strong bullish response, influenced in part by a weakening US dollar, has signaled a bullish sentiment.
As we break through the upper boundary of the descending price channel, we're setting the stage for an attempt to breach the supply zone positioned around the price level of 1.12.
Conversely, the bearish scenario finds support around the 1.0650 region, where we saw the formation of local troughs in late May and early June.
Turning our attention to USD/PLN — the Polish zloty paired with the US dollar — we see a similar pattern to other dollar pairs.
The situation mirrored periodic strength in the US dollar, which in turn triggered corrective movements. For USD/PLN, this trend led us close to the supply zone near PLN 4.15 and also resulted in the
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