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EUR/USD Rises and Gets Some Support from US Fundamentals

July 29, 2020 by

The euro began rising against the US dollar even before the US macro report for today were released. After the announcements, the pair continued its uptrend despite the fact that the indicators were more or less strong for the US dollar.

US pending home sales continued to rise in June, increasing by 16.6% compared to the 15.6% median forecast and to the record-setting gain by 44.3% in May. (Event A on the chart.)

Crude oil inventories declined by 10.6 million barrels during the week ending July 24. The forecast was for a growth by 1 million barrels. A week earlier, the inventories gained 4.9 million barrels. Meanwhile, total motor gasoline inventories increased by 0.7 million barrels. (Event B on the chart.)

FOMC left its monetary policy unchanged with the federal funds rate at 0%-0.25%. There were two notable changes compared to the June meeting’s statement. First, Fed noted that the economy has picked up:

Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year.

And second, that the economic future will depend on how the pandemic evolves:

The path of the economy will depend significantly on the course of the virus.

Other than that the July statement was identical to that of June. (Event C on the chart.)

EUR/USD as of 2020-07-29

If you have any comments on the recent EUR/USD action, please reply using the form below.

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