Yesterday's U.S. business sentiment data for July came out mixed: Markit's Services PMI rose from 52.9 to 55.7, and the Composite Index increased from 52.9 to 55.1, while the ISM index weakened from 50.8 to 50.1. The euro neither rose nor fell by the end of the day, which allowed the media to interpret the more authoritative ISM data as weak. However, we would draw attention to even more important figures (from a pricing perspective): the trade balance and GDP forecast.

The trade deficit for June improved from –71.7 billion dollars to –60.2 billion, marking the best result in two years. Trump has managed to pull the U.S. out of a record trade deficit of –$ 138 billion over the last six months — the worst in history. If Trump's tariff policy continues at the same pace, the trade balance could turn positive as early as next year for the first time since 1982. Naturally, this would significantly strengthen the dollar. Also, the Atlanta Fed's GDP forecast for Q3 was raised from 2.1% to 2.5%.

Contrary to the narrative about capital flight from the U.S., we observe the opposite: inflows of foreign investments into U.S. securities in May totaled 318.5 billion dollars.

The U.S. balance of payments for Q1 is very poor — a deficit of 450.2 billion, also a record low. But for Q2, we expect a sharp improvement.

It seems that the current mixed and weak data, especially after Trump took control over the reporting, will increasingly be perceived by the market as informational noise. Major players will now focus more on the key factors affecting currency exchange rates: capital flows, inflation, government bond yields, and central bank balances. Added to this is the difference in economic growth rates between the U.S. and the Eurozone.

On the technical side, we see the euro consolidating for three days between the support level at 1.1495 and the balance indicator line. The Marlin oscillator's signal line is moving horizontally. The MACD line, which had started to turn downward, suddenly shifted into a sideways movement. All of these point to a potential upward move — but a fragile one.

If the price breaks below the 1.1495 support, it would open the way to 1.1380, followed by a decline to 1.1266. This remains our primary scenario.

The first signal that the price has chosen a downward direction would be consolidation below the MACD line on the four-hour chart (1.1540). The Marlin oscillator is declining slightly ahead of the price and is gradually pulling it down. We are waiting for further developments.

The main scenario would likely only be invalidated if the price breaks above the MACD line on the daily chart (1.1774). Essentially, the 1.1495–1.1774 range is a zone of free wandering, primarily driven by news noise.