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After the weekend, the dollar continues to depreciate in reaction to comments from President Trump, who is unhappy with the strength of the currency and the Fed's policy. The stock markets are down because Trump's interference and fears about trade conflicts are spoiling the mood. For similar reasons, it loses oil, but the weak dollar helps in the reflection of gold.
The dollar sell-off started on Friday after the words of US president Trump, who blames the Fed for a strong dollar and is afraid that this will raise interest rates twice this year. Earlier, Trump shocked the market by accusing China and the EU of manipulating the rate. Investors have stopped to feel comfortable on long positions in USD, which they have been building for the last days, and began to close orders on a massive scale. On Monday the volatility is slightly lower and in the last hours the dollar tries to make up for losses, but USD/JPY went down to 110.75, EUR/USD jumped to 1.1750.
In the stock market, Trump's comments add cause for concern to the already rich list related to commercial disputes, which is not conducive to growth. Japanese Nikkei225 takes tips from USD/JPY and drops today by 1.4%. Markets in China opened low, but later began to bounce back and Shanghai Composite gains 0.6%.WTI oil calmed down to nearly $68 after bumping by $2 on Friday. Market perturbations scared investors in long positions, which resulted in a reversal of the whole Thursday's increases. Strongly correlated with fluctuations in the dollar, the zloty strongly rebounded on Friday and today it stopped only before 1235 USD.
On Monday the 23rd of July, the event calendar is light in important data releases, but the global investors should keep an eye on Wholesale Sales data from Canada and Existing Home Sales data from the US. Later, during the US session, there is a scheduled speech from BOE Deputy Governor for Monetary Policy Ben Broadbent.
EUR/USD analysis for 23/07/2018:
Let's now take a look at the EUR/USD technical picture at the H4 time frame after the Friday's rally form the level of 1.1574. The bulls have managed to rally towards the level of 1.17158, but early in the Monday's morning, the correction towards the golden trend line is now in development. The price has bounced from the level of 1.1710, which is the internal golden trend line support and it looks like the bulls are trying to push the market higher towards the level of 1.1790, the local swing high. The strong and positive momentum is supporting the bullish bias. The key resistance zone is seen between the levels of 1.1829 - 1.1850.
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