EURUSD gives excellent opportunities for sales

The recent growth of the EURUSD pair, in our opinion, is an excellent opportunity for selling the pair more expensively. Let's try to figure out why this is so.

To begin with, the growth of EURUSD is not a result of the strength of the euro, but a consequence of local dollar sales. That is, the future dynamics of the EURUSD pair should be viewed through the prism of the dollar, not the euro.
And the dollar is in good shape. This concerns both the general state of the US economy (see the latest data on GDP or the US labor market) and the monetary policy of the Fed (the Central Bank has already raised the rate twice and plans to do it 2 more times). The publication of yesterday's minutes of the last meeting of the FOMC showed that the Fed continues to bend the tightening line of monetary policy. The general conclusion on reading the Minutes is that they plan to raise the rate further if there will be no tough economic contra-indications for this. As for the decline in the dollar recently, this is already the usual result of Trump. It's about his verbal interventions about the need to reduce the dollar and its general discontent with the Fed's monetary policy, and about a new round of political scandal related to the election of the US President (but this scandal has been going on for more than a year and a half, so far this factor is not pulls on the decisive in the fate of the dollar).

Returning to the dynamics of the pure euro, we note that today's rather weak data on the Business Activity Index in the production sector of the Eurozone (fact 54.6 versus the forecast of 55) does not set the optimistic mood. The Eurozone economy continues to be in a rather weak form, in contrast to the US economy, which is now in the best form in the last 10 years. And the recent surge in panic over the situation with Turkey, as well as the potential budget problems of Italy do not play in favor of the euro.

Total, there are no reasons for the growth of the euro, but the dollar may well find support (it's a symposium in Jackson-Hole, which starts today). Technically decline in the pair EURUSD also looks preferable. Therefore, our recommendation is the sale of the EURUSD pair, at least until it is quoted below 1.1640. The nearest sell targets are located at the bottom of 1.14.