EURUSD: trading range from the 25th of July still intact

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On Tuesday the 30th of July, trading on the EURUSD pair closed 0.09% up. The pair remained within the range from the 25th of July. The single currency is getting propped up via the EURGBP cross, which has been on the rise since the 25th of July on the back of Brexit uncertainty.

The British pound is under pressure over the increased likelihood of the UK exiting the European Union without a deal. New Prime Minister Boris Johnson has said that the UK should prepare for no deal if the EU refuses to compromise.

Day’s news (GMT+3):

• 10:55 Germany: unemployment rate (Jul).
• 12:00 Eurozone: CPI (Jul), GDP (Q2), unemployment rate (Jun).
• 15:15 US: ADP employment change (Jul).
• 15:30 Canada: GDP (May).
• 16:45 US: Chicago PMI (Jul).
• 17:30 US: EIA crude oil stocks change (26 Jul).
• 21:00 US: Fed interest rate decision and monetary policy statement.
• 21:30 US: FOMC press conference.

Current situation:

My prediction that we’d get a test of the lower boundary of the 1.1100 – 1.1188 range has not yet come to pass. The EURUSD pair has been trading sideways for the last 3 days. The rally on the EURGBP pair is providing support to the euro, so markets are largely ignoring the ECB’s intention to ease monetary policy and even lower interest rates.

I’m still expecting 1.11 to be tested. We can’t rule out either boundary of our range being reached. Still, the odds are in favour of a drop.

There’s no chart today because markets are waiting on the FOMC interest rate decision. A rate reduction of 25 base points has already been factored in, so we may get some sharp movements if the key rate is reduced by 50 base points, or if we get some dovish rhetoric from Jerome Powell during the press conference to follow. Talks between the US and China have begun in Shanghai. Markets do not have high hopes for this. Today’s economic event calendar is quite full.