The improvement in demand for the dollar this week appeared after the release of the US Federal Reserve meeting minutes, as the FOMC expressed its concerns about the economic recovery and the extent of the impact of the second wave of Corona on the economic return, employment, and inflation, and the committee rejected the idea of ​​controlling the long-term yield curve, which helped improve Dollar exchange rates The delay in Congress’s approval of the financial support package for the unemployed and the news of an increase in injuries in a second violent wave of Corona spread across Europe, along with the continuing tension with China, helped improve demand for the dollar and improve its performance. Economic indicators fell in both America and Europe, as weekly US jobless claims rose again above one million weekly demand, and MARKIT PMI showed an unexpected decline in its European reading, but US indicators came out strong, which implied the outperformance of the US economy again.
The markets will begin this week to follow the second wave of the spread of the COVID 19 pandemic across Europe and expectations that US President Trump will announce a medical breakthrough and discover a new vaccine. Economic indicators will also start to appear, accordingly, as the German GDP for the second quarter of the year will be announced on Tuesday, where an expected decline of 11.7% in Growth and the German IFO index, as it is expected to show improvement in its three indicators of the current reality, expectations and business environment. On Wednesday, the US durable goods index for July will be announced, where a rise of 3.3% is expected, followed by the announcement of the second reading of the gross domestic product on Thursday, where the reading is expected to come when growth retreated by 32%.
Technical analysis: (technical indicators lose their significance when volatility increases due to major events) TheUS dollar
slightly improved the dollar exchange rate index against the basket of currencies (DXY), as it closed at 93.20 after retreating and testing the 92.00 level. Technical indicators despite the current price correction are still negative and the chances of continuing pressures on the dollar’s ​​exchange rate are likely to return to decline as long as trading continues below basic price rates in the range of 97.20-97.50. Analysts believe that the current rise is corrective and may stop at 94.00 or surpass it to test 94.50, as the strongest resistance That may prevent the continuation of the rally as the dollar will return to decline to test the support levels in the range of 91.80-92.00 again. Therefore, the price is likely to fluctuate and continue trading in the 92.50-94.50 range for this week.
Support levels 93.00 – 92.50-91.80 Resistance: 94.00 – 94.50 – 95.20
The European Euro:
The euro’s exchange rate declined this week and closed at $ 1.1796. After the price rose and tested the resistance at 1.1965 dollars per euro, and retreated from it. The euro retreated to correct the overbought condition, as the saturation indicators helped in a natural technical correction that brought prices back to a level of equilibrium and stability for the price, but the technical indicators still support the continuation of this correction to test the support levels at 1.1710 and below 1.1657. As the price is likely to stabilize around this range A drop below it means a decline to test the strongest support levels in the 1.1540 range. While the level of 1.1870 constitutes the strong resistance before 1.1965, which is supposed to prevent any rise in the short term, so it remains likely to continue trading in the range of 1.1650-1.1850 with the likelihood of a decline in the indicators and support the pressures for a further decline in the price in the short term.
Support Points: 1.1750 -1.1710 -1.1650 Resistance: 1.1840 -1.1880 – 1.1965
Israeli Shekel:
The exchange rate of the dollar against the shekel stabilized during the past week at 3.4000 and closed at 3.4020 shekels per dollar. The Israeli Central Bureau of Statistics announced that the gross domestic product for the second quarter declined by 28.7% on an annual basis, in the worst decline since the establishment of Israel, after it decreased by 6.8% for the first quarter of the year, which means that there is a decline of 10.1% on an annual basis for the first half of the year. The Central Bank of Israel believes that this decline was better than what was expected and that the performance of the Israeli economy was better than the American and the European, as it re-estimated its forecasts for the year 2020, as it expects an economic contraction of between 4.5% and 7% depending on the development of the spread of Corona and the levels of economic closure. Analysts attribute the price stability to the investors ’reluctance to buy the shekel at this level in light of the continued intervention of the Israeli Central Bank to limit the strength of the shekel and in light of the increasing possibilities of a second wave of Corona, and the betting on the rise of the dollar seems difficult in light of the great rise in US stock indices and the continued registration of numbers New record. Technical indicators are very stable and dull, but they are still negative, especially with no momentum in any direction, so it remains likely to continue trading around 3.400 in the range of 3.3750-3.4250 waiting for the indicators to improve and the dollar to rise to test higher levels around the 3.4500 range, where this remains the most likely option.
Support: 3.3950 – 3.3800 – 3.3700 Resistance: 3.4280 – 3.4350 – 3.4530
Gold and oil:
Gold prices also fell this week and closed at 1940 dollars an ounce. Analysts favor price stability, awaiting what the Fed governor will say next Friday regarding his future plans to contain inflation. The Fed’s acceptance of inflation exceeding the target level at 2% means gold will rise again. Technical indicators are positive as long as it continues to trade above $ 1890, but a drop below it may lead to a deeper correction to test the great technical support level at 1863, as it will remain likely for gold to maintain the bullish momentum and re-test higher prices as long as it maintains this support level and has not been breached. The resistance is currently stable at the level of 2000, where it is expected to continue trading below it, awaiting more financial and economic stimulus packages.
The benchmark Brent crude oil prices stabilized and closed at $ 44.28 a barrel after European economic indicators declined and did not confirm a rapid economic recovery. Although the US indicators were promising and positive and suggest a recovery and recovery in the US economy, oil needs demand from both to be able to maintain this level or rise, especially with the stability of supply and demand in the markets now. Analysts believe that trading at these levels will continue for the time being as long as there is no significant change in the elements of supply or demand. Therefore, trading remains expected in the 42-46 range for now.
