After Fed Chairman Powell stated that the economic recovery was not good enough to start Tapering, the depreciation of dollar assets accelerated the recovery movement in the pair. Powell also stated that the catalysts needed to reduce the bond-buying program are not sufficient, and that this possibility will continue to be discussed at future meetings and that advance notice will be provided if necessary. Powell also expressed his expectation that inflation will remain high in the coming months. In the Beige Book report for July, the Fed stated that the country's economy has strengthened since the end of May, while most businesses expect further increases in prices in the coming months. The weakness of the dollar, which emerged after all these developments, was limited slightly by the macroeconomic data announced in the USA. While applications for weekly unemployment benefits in the USA decreased to 360 thousand people, industrial production in June was realized below expectations with an increase of 0.4 percent. Philadelphia Fed Manufacturing Index, on the other hand, came in below expectations with 21.9 in July, while the New York Empire State Manufacturing Index exceeded expectations with 43.0.
If we talk about the developments in the Euro Zone, ECB President Lagarde's announcement that the bond buying program will continue until 2022 and he mentioned inflationary concerns put pressure on the Euro side. Following this development, the Euro Zone experienced a contraction of 0.1 percent in industrial production in May. While the Euro side is still partially weak, it can be said that the EURUSD parity returned to its activity above the 1.18 level, with the advantage it experienced due to the dollar, while its rises remained somewhat weak.
With the preservation of the activity above the 1.18 level in the EURUSD parity, the rises can reach the 1.1834 level and the 1.1890 and 1.1950 resistance levels. However, in case of a possible dissolution, we continue to follow the 1.1770 support levels first, and below this level, 1.17 and 1.1650 support levels gradually.