The main events last week that markets responded to were the presentation of the report from the head of the Fed Jerome Powell in Congress and the publication of data on inflation in the US.

Weak values of GDP and retail sales from the US will put pressure on the dollar. There is a possibility of resumption of growth in EUR/USD and NZD/USD pairs.

The main events last week that markets responded to were the presentation of the report from the head of the Fed Jerome Powell in Congress and the publication of data on inflation in the US.

We paid attention to this precisely because in the current situation, when investors around the world are in a state of uncertainty in resolving trade issues between Washington and Beijing, as well as a high probability of lowering interest rates by the US regulator. This is what forces them to react, sometimes even contradictory.

Last week, Powell, in his speech at the Senate Banking Committee made it clear that the Central Bank is ready to respond to negative signals in the country's economy and take support measures but already on Thursday, the publication of positive data on consumer inflation had a restraining effect on the market mood. This made him doubt the fact that a possible reduction in the key interest rate at the end of the July meeting by 0.25% will be just a one-time event, at least in the current year. But after some doubts, against the background of the publication of consumer inflation values, the mood improved somewhat already on Friday. It seems that investors have decided that better a small fish than an empty dish, which means that a decrease in interest rates by a quarter of a percentage point is still not that bad. On this wave, stock markets received support and the dollar continued its gradual decline.

This week, the attention of market players will be focused on the publication of data on retail sales and the first release of US GDP figures for the second quarter. As for the figures for retail sales and their volume, they are projected to decline here and the same applies to data on import and export prices.

We believe that if these data turn out to be no higher than forecasts, including GDP forecast, it will support the demand for risky assets with a simultaneous increase in pressure on the dollar, as weak values of indicators will increase expectations not only of the probability of a one-time decrease in interest rates but also a possible beginning. total cycle to reduce them.

Forecast of the day:

The EUR/USD pair is trading below 1.1280. We believe that the pair may continue to grow in the wake of expectations of weak US GDP data and retail sales, which will be published on Tuesday. Overcoming the price mark of 1.1280 will lead to an increase in prices to 1.1340.

The NZD/USD pair is testing a local maximum of 0.6720. Overcoming on the expectedly strong data on consumer inflation in New Zealand and the weak values of economic statistics from the US will lead to a continued rise in prices to 0.6785 with the prospect of an increase to 0.6800.