It doesn't matter that the dollar is terribly oversold and the market has long overdue a full correction. Investors do not yet believe in a bright future for the dollar and the US economy. And even extremely positive statistics for the dollar could not somehow affect the mood of market participants. TThey continued to play against portraits of dead American presidents. And in many ways, this behavior contradicts even basic common sense. Although there are attempts to explain what is happening with the upcoming presidential elections in the United States. Like, it's all about the incredibly wise and thoughtful decision of Joseph Biden regarding the candidacy for the post of Vice President. However, all this looks just ridiculous and more like trying to falsify facts. After all, for more than a month, all the most progressive mass agitation and disinformation media have been saying that Joseph Biden will definitely win the presidential race. They even dug up an oracle who allegedly never made a mistake in his predictions about who would become the next president of the United States. What about this design changes the VP's personality? Nothing at all. But what's even funnier is that if the weakening of the dollar is connected precisely with the announcement of the name of the candidate for the post of vice president, it turns out that the victory of the Democrats in the presidential election from the point of view of investors is a negative factor for the US economy. After all, why are they getting rid of dollars? And this, again, conflicts with the ongoing criticism of Donald Trump, which began the moment he moved into the White House. After all, the same progressive mass agitation and disinformation since 2016 have been doing nothing but blaming Donald Trump, and it is he who is declared to be the culprit of all economic problems. And according to this logic, the victory of the Democrats should be perceived as a boon for the American and the world economy. But investors behave as if the opposite is true. Maybe the media has just lied to us all these years? No, this cannot be. In general, a strange picture turns out. It's probably much simpler. Simply, against the background of not too confident signs of economic recovery, the process of taking measures to support and stimulate it is simply stalling. In fact, it doesn't move at all and for which we need to say a special thank you to the Democrats. But in Europe, with all its mixed and mismatched farce, this task was handled relatively easily. But if the economy does not receive proper support, then all these signs of an emerging economic recovery may be in the distant past, and the economy itself will slide into a new wave of decline. The picture is simply terrifying. Therefore, investors do not believe in the dollar.
However, do not think that these mythical investors are such complete idiots. They follow macroeconomic statistics very closely. And yesterday, the dollar showed growth over and over again at the time of publication of certain data but it was only temporary. For example, the first such case happened at the time of publication of data on industrial production in the euro area, the rate of decline of which slowed from -20.4% to -12.3%. The trick is that they should have slowed down to -12.0%. That is, the recovery of European industry is a little slower. Nevertheless, it is still a restoration. Industrial production rose 9.1% over the month, which is pretty good.
Industrial production (Europe):
The second attempt at growth was made just at the time of the publication of inflation data in the United States. Moreover, the reason is very serious, since inflation has accelerated from 0.6% to 1.0%. But, even according to the most optimistic forecasts, it should have grown to 0.8%. However, despite all this optimism, investors still think long-term which is not positive at least for the US dollar and US economy.
Inflation (United States):
Based on all this, the data published today on applications for unemployment benefits are unlikely to change the overall picture. They will most likely contribute to a slight increase in the dollar temporarily, which will subsequently be replaced by its weakening. But the forecasts are relatively good. Thus, the number of initial applications for unemployment benefits may have declined from 1,186 thousand to 1,150 thousand. The number of repeated applications should decrease from 16 107 thousand to 15 800 thousand. And even if unemployment is still at an extremely high level, it doesn't matter whether there is a trend towards the recovery of the labor market. However, if the economy does not receive support, everything can change. These are the risks that investors keep in mind. Moreover, the pace of reducing the number of repeat applications is clearly stalling.
Repetitive Unemployment Insurance Claims (United States):
The EUR/USD currency pair rebounded from the support area of 1.1700/1.1720 once again, which led to the retention of the amplitude of the side channel at 1.1700/1.1900. It can be assumed that the course of the price movement within the established framework will remain in the market, where consolidating the quote above 1.1830 will lead to a move in the direction of 1.1860-1.1890. An alternative scenario is considered if the price slows down relative to the current values with consolidation below 1.1800, which in theory, could return the quote to 1.1700/1.1720.
The GBP/USD currency pair continues to move in the lower part of the sideways channel 1.3000/1.3190, forming a variable turbulence within 50 points. Thus, two possible scenarios can be considered: the first is based on the price movement along the 1.3000 ---> 1.3190 course, where at first one, we should consolidate above 1.3085; the second scenario considers the price return to the level of 1.3000, where, if it consolidates below it, the price channel changes.
