In the summer of 2014, the heads of the European Central Bank decided to stabilize the economy and fight deflation by increasing inflation (reducing key rates, launching the QE program). After this decision, euro started to fall, and from 1.38000 reached 1.14000. This decision delivered benefits and stabilized the level of inflation. The "cheaper" Euro become more attractive for exporters, and increased the volume of sales, the inflow of finance into the eurozone, and also stabilized the GDP.
Analyzing the movement of the currency pair over the past 3 years, we can say that the price is in the 1.15 - 1.05 corridor. And when the euro comes to its "maximum" to the level of 1.15000, a verbal or nonverbal intervention by ECB head Mario Draghi takes place, he makes every effort to weaken the prices of the single European currency.
At press conferences last week, Mario Draghi reported on the work done, the stability of the economy, and positive inflation rates on a very positive note. This caused interest of market players, and rumors began about the beginning of the reduction of the QE program. At recent press ECB conference, President Mario Draghi tried to lower the price of the Euro, saying that the market did not correctly accept his statement. But market participants ignored this notice.
Last week, oil showed a rapid uptrend, which completed its confident move to the important key level of $ 45 per barrel. On it, the upward trend has stopped, and another wave of a downtrend, which is aimed at a mark of 40, is expected.
S & P 500
The US index includes 500 US companies with the largest capitalization.
Before the July’s reporting on sales for the second quarter, the index has stopped in its record growth. The reason for the uncertainty of market participants was the view that technological giants are too overpriced, and that in the near future there will be a long corrective movement for all companies of American giants. If the level of 2420 is broken, then we should expect a further decline to the psychological level of 2400.
USD / CAD
Due to the loss of interest to the US dollar and the retracement oil, the US / Canadian dollar pair was showing a downward trend throughout the week. At the end of the week, an important level of 1.30 was broken, and market participants fixing profit on the movement, stopped the trend at 1.2950. Given the further growth of the US dollar and the possible decline in oil prices, at this week we can expect an uptrend scenario for USD / CAD.