No Surprise The information presented in this publication is provided for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation to buy, and should not be used as a basis or considered an inducement to engage in any investment. The macro point No SurpriseThe Macro PointThe main focus last week was the European Central Bank meeting. It held no surprises. The monetary policy remains unchanged: the main rate is at zero, banks continue to face a 0.50% charge on deposits they place with the central bank instead of lending to customers, and the various asset purchase programs continue (particularly the Pandemic Emergency Purchase Programme, PEPP). The ultra-accommodative bias that has prevailed since March 2020 remains to best support the recovery, which could be affected by the virulence of the delta variant. The EUR/USD reacted very little to these widely expected announcements. On last Thursday's session, the EUR/USD lost 0.21% - confirming the persistence of the long-term downward trend.On the health front, new restrictions have been implemented in several European countries (e.g., health pass in France to access certain public places) but the situation remains under control. Hospitals are far from facing a risk of overcrowding. The only country causing concern is the United Kingdom, where the choice was made to lift all restrictions and rely on individual responsibility. Some experts anticipate that if the daily number of new Covid cases continues to rise (currently close to 50,000 new cases per day), in three weeks, the country may be forced to reverse restrictions and implement strict measures to limit the virus spread. These health concerns largely explain the recent troubles of the British pound against the euro, the US dollar, and even the Japanese yen. In a way, the lax health approach of the UK's political authorities has replaced Brexit as a source of apprehension for traders.Finally, it seems that the growth peak for France has been reached. The best in terms of activity dynamics is probably already behind us. This is the lesson drawn from the recent publication of business climate indicators. In July, it slightly decreased, losing one point to 113 compared to June. However, it remains well above its pre-Covid level, which was 106. Technical point In the foreign exchange market, recent trends have been confirmed in past sessions. The EUR/USD reached a three-month low at 1.1755. The monetary policy differential between the Federal Reserve and the European Central Bank remains the main driver of the pair's decline, with a new short-term target at 1.1708. The EUR/GBP remains within its three-month range between 0.85 and 0.87. Finally, fears about the delta variant have led to increased demand for JPY from traders in recent weeks, explaining the nearly 2% monthly decrease in the EUR/JPY pair. The next technical analysis target is 128.78 (weekly support).The supports and resistances displayed below indicate the low and high points within which rates are expected to evolve during the week.SUPPORTSWEEKLYRESISTANCESWEEKLYS2S1R1R2EUR/USD1.16001.17081.1821.1869EUR/GBP0.83980.84760.86040.8632EUR/CHF1.07161.0771.09091.0966EUR/CAD1.46251.4761.49651.5035EUR/JPY127.26128.74130.80131.70For personalized advice on trends and exchange hedging, contact our trading room: Announcements to follow July ends with the US Federal Reserve meeting this Wednesday. This is a highly anticipated event by traders as the central bank could provide valuable guidance on future monetary policy before the Jackson Hole Symposium at the end of August. The press release at 8 pm French time is not expected to hold surprises. No monetary policy changes are anticipated for now. Rates and various asset purchase programs remain unchanged. However, Jerome Powell's press conference starting at 8:30 pm should be the week's highlight for the forex market. In line with recent statements before Congress, he is expected to reiterate that the central bank considers the significant inflationary pressures across the Atlantic to be temporary. However, he might provide some insights into FOMC discussions on tapering, which is currently the main market focus.Central bank meetings typically result in high volatility for USD pairs, notably EUR/USD – even more so this time given traders' high expectations. Therefore, it is imperative to adopt an appropriate foreign exchange hedging strategy ahead of the event. Significant price shifts in certain currency pairs cannot be excluded, especially in a market with particularly reduced volumes during the summer. One key word: caution.Below, find the publications and events expected to have a major impact on currency exchange rates.DAYTIMECOUNTRYINDICATOREXPECTATION26/0710:00IFO Business Climate Index (July)Decrease to 100.6 versus 101.8 previously.27/0716:00Conference Board Consumer Confidence Index (July)Slight drop expected to 125.8 but the three-month average remains very high.28/0708:00GfK Consumer Confidence Index (August)Fall to -4.0 compared to -0.3 previously.20:00Central Bank MeetingThe focus will be mainly on any reference to tapering and the central bank's assessment of inflation.29/0714:00CPI (July)Stable at 0.4% month-on-month.30/0708:30GDP (Q2)Consensus expects a slight increase of 0.1% from the previous quarter.30/0716:00University of Michigan Confidence Index (July)Increase to 81.3 compared to 80.8 previously.Did you enjoy this content? Share it!