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The triple negative pressure is over, and the plunge of 0.6% is just the beginning? Market focus on US PMI
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Decision Analysis]: triple negative negative pressure, a plunge of 0.6% is just the beginning? The market focuses on US PMI." Hope it will be helpful to you! The original content is as follows:
The euro lost momentum against the US dollar on Tuesday (September 2) and turned into a plunge, interrupting its three consecutive days of upward trend, with a significant decline of more than 0.60%. It is trading around 1.1640 and maintains a bearish tendency in the short term. Mainly suppressed by the strengthening of the US dollar, the US dollar index soared about 0.60% to around 98.28. The market focus on the day will be on the US August ISM Manufacturing Purchasing Managers Index released later.
Affected by the ongoing conflict between Russia and Ukraine, the euro continues to weaken against the dollar.
According to the Guardian, Russian drones launched an attack on power generation facilities in northern and southern Ukraine last Sunday, causing power outages of nearly 60,000 users. Ukrainian President Zelensky then vowed to fight back and ordered more attacks on the depths of Russia.
As the Russian-Ukrainian conflict enters its third and a half years, both sides have stepped up their air strikes in recent weeks: Russia will target Ukrainian energy and transportation systems, while Ukrainian continues to attack Russian refineries and oil pipelines. Ukrainian President Zelensky vowed to take revenge and ordered more attacks on the deep areas within Russia. The ongoing conflict between Russia and Ukraine means rising energy costs and increased geopolitical uncertainty in the euro area, which usually brings selling pressure to the euro.
The turmoil in the French government sparks concerns about the recession
French Prime Minister François Bellu will launch a vote of confidence on September 8, trying to force parties to take positions on their budget plans, which will put the survival of his government to the test. The announcement triggered a sell-off in euro zone assets.
Belou told reporters at a press conference in Paris on Monday that President Macron has agreed to advanceConvene a meeting of parliament so that the government can demonstrate plans and hold a vote of confidence.
Le Pen, the leader of the far-right National Union in the National Assembly, said on social media: "We will obviously vote against the vote of confidence in the François Belu's government. What François Belu obviously does not understand is that the French are fully aware of the economic and financial crisis."
This statement shows that the deepening of dissatisfaction with the French people with politics and the risk of persistent uncertainty, which may drag down the euro zone exchange rate trend in the short term.
The rising effect of buying on the US dollar exceeded the negative sentiment brought by market interest rate cut expectations
The US dollar won the buy under the selling of the global bond market and rose to a four-day high. As short-term charts show slightly overbought, this triggered profit-taking for some www.xmniubi.commodities.
Over the Atlantic, a senior Fed official made dovish remarks last week, acknowledging signs of slowing U.S. economic activity and suggesting monetary policy may be adjusted accordingly. This statement has intensified the market's expectations that the Federal Reserve will turn to loose policies and may suppress the US dollar's trend.
U.S. Treasury Secretary Scott Becent defended U.S. President Donald Trump’s decision to fire Federal Reserve member Lisa Cook on allegations of mortgage fraud. In addition, Trump also criticized Federal Reserve Chairman Jerome Powell for not cutting interest rates.
Traders are looking forward to the release of the U.S. job report in August to gain new momentum. The report may provide insights on the economic situation and suggest whether interest rate cuts are about to www.xmniubi.come. The U.S. economy is expected to add 75,000 jobs in August, while the unemployment rate is expected to rise to 4.3% during the same reporting period.
Technical Outlook
Technical aspects show that in the short term, the euro is showing a significant downward trend against the US dollar. Against the backdrop of a strong strengthening of the US dollar, the currency pair is under strong suppression.
At the same time, the RSI of the relative strength index on the 14th was at the bottom of the midline, accumulating lower action energy, indicating a short-term bearish tendency.
The recent euro-dollar trend is forming a potential convergence triangle pattern. The highs of the fluctuation gradually move downward, while the lows gradually move upward, and the range of price fluctuations narrows. This is usually the market is accumulating energy and preparing for the next major market trend.
In the upward direction, the recent high point of 1.1742 forms a strong resistance. If it effectively breaks through this resistance level, it is possible to reach a high of 1.1829 in the past three months;
In the downward direction, the recent low point of 1.1573 constitutes a preliminary support level. If it falls below this support level, the exchange rate may continue to fall to the support area near the 100-day moving average (MA) (1.1518) and the downward trend line.
The above content is about "[XM Foreign Exchange Decision Analysis]: Triple negative pressure is pressed, a plunge of 0.6% is just the beginning? The market focuses on US PMI" and is carefully www.xmniubi.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading.help! Thanks for the support!
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