Weekly Market Analysis: July 19 - 23, 2021 - US Dollar Strengthens

This weekly market analysis for July 19-23, 2021, will discuss several factors that cause price movements in the market over the next week. The greenback is still strengthening against several other major currencies. The ongoing pandemic conditions coupled with the presence of the Delta variant have caused market players to switch to liquid assets.

As we know, Greenback is one of the safe haven assets besides Gold. The strengthening of the US Dollar is supported by physical buying actions carried out by market players due to concerns about the threat of the spread of the Delta variant of the Covid-19 virus. According to information, Corona sufferers in the US and Europe have increased significantly, moving in line with the increasing number of Delta variant sufferers in Asia. According to information sources, global daily cases that occurred in a week have been recorded at more than 500,000 sufferers, the highest number since last May. EURUSD moved lower for the Euro currency compared to the US Dollar currency. The increasingly crazier Delta variant of the Covid-19 virus in the world, especially in several countries in Europe, has weakened the Euro currency.

In addition to the above causes, the weakness of the Euro is also pressured by the choice of market players who prefer the US Dollar over other assets. This makes the US Dollar a favorite compared to Gold. For today's market movement, EURUSD is predicted to continue to weaken the Euro currency against the US Dollar currency. In the windmill country, the Netherlands has actually relaxed its social restrictions when entering this summer. However, it seems that the Dutch government will re-implement a lockdown after an increase in the number of Covid-19 cases. Currently, the Netherlands, which initially only had around 500 new sufferers per day, has jumped sharply to more than 10,000 new sufferers per day. This spike has occurred over the past 2 weeks.

The impact of the incident in the Netherlands does not rule out the possibility that it will have an impact on all countries in Europe. GBPUSD is moving lower for the Pound Sterling currency against the US Dollar. The weakening of the Pound Sterling is also due to being burdened by the strengthening of the US Dollar. The increasing Delta virus which is getting crazier in the UK and market players who choose the US Dollar as the favorite currency compared to other currencies. On the other hand, the UK's plan to relax social restrictions has been canceled because the new Delta variant virus pandemic is rampant. Today, GBPUSD is expected to continue to weaken for the Pound Sterling currency compared to the US Dollar. USDJPY is moving lower for the Yen Jeoang compared to the US Dollar. In addition to the fact that the US Dollar is currently the favorite compared to other currencies, the decision of the Bank of Japan (BOJ) to reduce the projection of Japan's economic growth this year.

For today's market movement, the Yen is predicted to continue to weaken against the US Dollar. Japan is also one of the countries with the most Delta virus sufferers in Asia. AUDUSD is moving lower for the Aussie currency compared to the US Dollar. The spread of the Delta virus in Asia has also affected Australia. In addition to the Delta virus which is getting crazier in Asia, the behavior of market players who choose the US Dollar as their favorite also weakens the Aussie currency. For today's market movement, AUDUSD is predicted to continue to weaken for the Aussie currency compared to the US Dollar. Oil prices moved down in Friday's market trading last weekend. In addition to the strengthening US Dollar and concerns about the Delta virus reducing demand for fuel oil, the decision of the OPEC+ meeting to gradually increase its production supply in the market also lowered oil prices.

For today's market movement, it is predicted that the price of Oil will continue to decline. In the Friday market trading last weekend, the price of Gold moved down. This decline was caused by the strengthening Greenback, causing the movement of Gold to be powerless to continue its increase. In addition, Gold was also pressured by positive sentiment from market players regarding the release of US economic data. The economic data is Retail Sales data. In addition, market players turned to safe haven assets due to the worrying conditions of the effects of the Covid-19 virus pandemic, the Delta variant in the world. The movement of the Gold market today is expected to continue its decline. The strengthening of the US Dollar is one of the factors that suppresses the price of Gold. As is known, if the Greenback strengthens, the movement of Gold will decline and be powerless.

1. Important Data/High Impact Weekly Market Analysis 19 - 23 July 2021

1.1 Monetary Policy Meeting Minutes (AUD)

Tuesday, 8:30am WIB. This is a detailed record of the RBA Reserve Bank Board's most recent meeting, providing insight into the economic conditions that influenced their decision on whether to keep, cut or raise interest rates. This meeting is held 11 times a year, and 2 weeks after the Cash Rate is announced.

1.2 Monetary Policy Statement & Main Refinancing Rate (EUR)

Thursday, 18:45 WIB. Monetary Policy Statement This is the main tool the ECB uses to inform investors about monetary policy. It contains the outcome of their decision on interest rates and comments on the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues about the outcome of future decisions. The ECB usually changes the statement slightly with each release. These changes are what market participants focus on. Main Refinancing Rate This data is information on the interest rate on the main refinancing operations that provide most of the liquidity to the banking system. The interest rate decision is usually priced into the market, so it tends to be overshadowed by the ECB Press Conference, which is held 45 minutes later. The source changed the release frequency from monthly to 8x per year in Jan 2015. Short-term interest rates are the most important factor in currency valuations - traders look to most other indicators only to predict how interest rates will change in the future. This meeting consists of the ECB's 6 Executive Board members and 15 of the 19 Eurozone central bank governors voting on where to set interest rates, through a rotation. The vote breakdown is not disclosed to the public.

1.3 ECB Press Conference (EUR)

Thursday, 7:30 p.m. WIB. This data is about a press conference that has 2 parts - first a prepared statement is read, then the conference is open to questions from the press. The questions often lead to unscripted answers that create great market volatility. This is one of the main methods the Board uses to provide investors with information about monetary policy. It covers in detail the factors that influenced the latest interest rate decision, such as the overall economic outlook and inflation. Most importantly, it provides clues about what monetary policy will be in the future.

1.4 German Flash Manufacturing PMI & German Flash Service PMI (EUR)

Friday, 14:30 WIB. German Flash Manufacturing PMI is data from a survey of about 800 purchasing managers in Germany that asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. It is a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers may have up-to-date and relevant insights into the company's economic outlook. Above 50.0 indicates industry expansion, below indicates contraction. There are 2 versions of this report that are released about a week apart - Flash and Final. The Flash release, first reported by sources in March 2008, is the earliest and tends to have the greatest impact. German Flash Services PMI is a Survey of about 800 purchasing managers that asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. It is a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers may have up-to-date and relevant insights into the company's economic outlook. A reading above 50.0 indicates industry expansion, below indicates contraction. There are 2 versions of this report released about a week apart - Flash and Final. The Flash release, which sources first reported in March 2008, is the earliest and tends to have the greatest impact.

1.5 Flash Manufacturing PMI & Flash Service PMI (EUR)

Friday, 15:00 WIB. Flash Manufacturing PMI Data from a survey of about 5,000 purchasing managers in Europe that asks respondents to rate the relative levels of business conditions including employment, production, new orders, prices, supplier deliveries and inventories. This is a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers may have up-to-date and relevant insights into the company's economic outlook. Above 50.0 indicates industry expansion, below indicates contraction. There are two versions of this report that are released about a week apart - Flash and Final. The Flash release, first reported by sources in March 2008, is the earliest and tends to have the greatest impact. Flash Service PMI A survey of about 5,000 purchasing managers that asks respondents to rate the relative levels of business conditions including employment, production, new orders, prices, supplier deliveries and inventories. This is a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers may have up-to-date and relevant insights into the company's economic outlook. A reading above 50.0 indicates industry expansion, below indicates contraction. There are 2 versions of this report released about a week apart - Flash and Final. The Flash release, which sources first reported in March 2008, is the earliest and tends to have the greatest impact.

2. Technical Review According to Weekly Market Analysis 19 - 23 July 2021

2.1 EUR/USD

2.2 USDCHF

2.3 GBPUSD

2.4 USDJPY

2.5 Gold

2.6 AUDUSD

2.7 Oil