22.07.2019: Euro slides down preparing for worst (EUR, USD, GBP, GOLD, CHF)

Some economists think that the euro/dollar pair is likely to be trading a bearish channel ahead of the ECB meeting. The greenback’s rally puts pressure on the euro. What is more, the demand for safe-haven currencies is growing amid the escalation of geopolitical tension in the Middle-East. The euro/dollar pair has remained unchanged. It continues to be trading sideways at the levels of 1.12 – 1.1280. Today, trading activity is sluggish as the economic calendar is uneventful. However, everything may change if geopolitical tension increases or the Fed provides some fresh news on its key rate. Traders are focusing their attention on the upcoming ECB meeting. If Mario Draghi takes a dovish stance on monetary policy, the EUR/USD is most likely to tumble. Nevertheless, its fall will be limited by the Fed’s meeting in June. Safe-haven assets are inching up. The quotes of the CHF/USD pair are growing. The Swiss franc has strengthened considerably against the euro. The demand for gold is also increasing. On Monday, the precious metal continued its two-week rally trading at $1426 per ounce. Apart from news on the Fed’s interest rate hike, the quotes of gold rose after the IMF called the US dollar overvalued. As the major world’s central banks are poised to cut their interest rates, gold is highly likely to advance to the level of $1500 per
ounce. Last week, the pound sterling sank to its lowest level in 2 years but then recovered slightly. The GBP/USD pair continues its downward trend due to the possibility of a no-deal Brexit. At the European session, the pair was trading at the level of 1.2471. However, it may return to the level of 1.2480 as the buyers’ activity remains weak. Thus, the further weakening of the GBP/USD pair looks quite possible. The British currency will gain momentum only if the greenback loses steam or a soft Brexit agreement is reached. The National Institute for Economic and Social Research gives a 25% probability that the UK is already experiencing a technical recession because of the Brexit saga.

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