Daily Analysis EURUSD - 21 July 2023

The latest data released on Thursday indicates a slight improvement in consumer sentiment in the eurozone for July. The index moved up to -15.1 from the previous -16.1 in June. However, the German Producer Price Index experienced a decline of 0.3% in June, resulting in an annual rate drop from 1% to 0.1%. Looking ahead, the European Central Bank is expected to raise rates by 25 basis points next week. The interest rate market is indicating a 60% chance of another 25 bps hike in September, making the ECB's statements crucial in shaping future market movements.

Meanwhile in the US, the latest data revealed that Initial Jobless Claims decreased to 228K for the week ending on July 15, marking the lowest reading since mid-May. This suggests that the US labor market remains tight. Consequently, US yields surged, leading to a boost in the US dollar. However, other reports presented a mixed picture. The Philly Fed saw a marginal increase from -13.7 in June to -13.5 in July, falling below the market consensus of -10. Additionally, Existing Home Sales dropped to 4.16 million (annual rate), below the estimated 4.2 million.

The EUR/USD corrected the first target around the 1.1125 level and also the DXY touched its resistance level at 100.800. However, the possibility of the breakout of these levels is high toward the 1.1100 level for EURUSD and 101.50 for DXY.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1400	1.1300	1.1250	1.1125	1.1100	1.1040