The optimism about the further growth of risky assets did not justify itself. Despite the strong fundamental statistics on the European economy, traders took advantage of the moment. While speculators were buying euros, major players closed their positions gained in the middle of the month. All this resulted in a fairly dense downward correction at the end of last week. Before we talk about fundamental statistics and the technical picture, I would like to say a few words about the fact that a possible candidate for the post of chairman of the Federal Reserve System, Lael Brainard, expressed a slightly different opinion about what decisions the committee should make and what the Central Bank should be guided by when changing the course of monetary policy. Many market participants are waiting for the statements of the President of the United States of America about who should head the Central Bank in the next four years. Let me remind you that the current chairman of the Federal Reserve System, Jerome Powell, expires at the beginning of next year. Brainard said during a recent interview that she is much more inclined to use all regulatory tools to prevent financial excesses and inflate asset market bubbles, thereby hinting at an approach to a tighter monetary policy. In her speech on Friday to the Aspen Economic Strategy Group, she also touched on developing a digital national currency. At the same time, Jerome Powell has a somewhat skeptical attitude to this. Despite some differences with the policy of the current chairman, Brainard noted that she agrees that now the Central Bank needs to see further improvement in the labor market before starting to reduce its asset purchase program. It is expected that President Joe Biden will not decide on who to appoint next to lead the Central Bank until September of this year. His proposal is still subject to approval by the Senate. However, Brainard did not say much about the difference in her approach to the Fed's current policy. Most of her speech focused on the economy and areas in which her views seem to coincide with the opinion of the current chairman.

As for the fundamental statistics on the eurozone, it was supposed to support the euro. However, traders looked at everything that was happening quite differently. Friday's report indicated that the eurozone economy recovered in the second quarter of this year. According to the preliminary estimate of Eurostat, the gross domestic product grew by 2.0% after falling by 0.3% in the 1st quarter. The growth rate exceeded the expectations of economists, who had expected a jump of 1.5%. On an annualized basis, GDP grew by 13.7% after a decline of 1.3%. It was predicted that GDP would grow by only 13.2%. Eurostat said that the preliminary GDP estimates are based on incomplete data sources and may be revised.

As for the countries, Germany performed the worst, where the economy recovered in the second quarter due to an increase in household consumption. The gross domestic product grew by only 1.5% compared to the first quarter after falling by 2.1%. Economists had expected more interesting figures — 2%. Detailed results for the second quarter will be published on August 24. On an annualized basis, GDP grew by 9.2% after falling by 3.1%. GDP was projected to grow by 9.6%. Thus, the eurozone's largest economy did not show the results that traders and economists expected, which makes us doubt the statements of representatives of the European Central Bank about more rapid summer growth this year. Let me remind you that according to the latest forecasts of the International Monetary Fund, the largest economy in the eurozone (Germany) should grow by 3.6% this year and by 4.1% in 2022. But inflation in Germany accelerated more than expected in July. It was due to a delayed baseline effect. According to Destatis, consumer price inflation jumped to 3.8% in July from 2.3% in June. The indicator also turned out to be higher than the forecast of economists at 3.3%. The increase in inflation was caused by the value-added tax return, which was temporarily reduced in July 2020 due to the coronavirus crisis. In July, the prices of goods increased by 5.4%, and the cost of services increased by 2.2%. Every month, consumer prices rose by 0.9% against the forecast of economists of 0.5%. The final results for July will be published on August 11.

As for France, inflation slowed down in July due to falling prices for industrial goods and services. According to preliminary data from the Insee statistical bureau, consumer price inflation slowed to 1.2% in July from 1.5% in the previous month. The data was higher than the forecast of economists, who had expected growth of 1%. Prices for manufactured goods fell by 1.1%, and food prices rose by 0.8%. Prices for services grew at a much slower pace — by 0.7%. As for the overall indicator for the eurozone, the consumer price index accelerated more than expected. However, everyone is well aware that the growth was mainly due to a jump in energy prices. According to preliminary data from Eurostat, inflation in the eurozone rose to 2.2% in July from 1.9% in June, thereby exceeding the target level of the European Central Bank, which is a solid 2%. However, it is worth recalling that following the results of the last meetings of the regulator and meetings. It was decided even to release inflation above 2% to compensate for past periods of stagflation. Meanwhile, core inflation, which does not include energy, food, alcohol, and tobacco, slowed to 0.7% in July from 0.9% in June, which once again confirms the correctness of the approach of the European Central Bank to assess the pace of recovery of the consumer basket. It was predicted that prices would slow down to 0.8%.

And also, at the end of last week, a rather important report was released on the unemployment rate in the eurozone, which is declining for the second month in a row, allowing us to look to the future with optimism. The data was released in June of this year, and such a delay in the report has a mediocre impact on the market. According to preliminary data from the statistical bureau Eurostat, the unemployment rate fell to 7.7% from 8.0% in May, which once again confirms that the European economy has returned to life after the partial lifting and weakening of the lockdown. The unemployment rate was expected to remain unchanged. The number of unemployed in the EU in June was 14.916 million people, of which 12.517 million people live in the eurozone. The unemployment rate among young people under the age of 25 fell to 17.3% from 17.9%.

As for the technical picture of the EURUSD pair, the main task for buyers of risky assets is to regain control over the resistance level at the base of the 19th figure. Only a break in this range will strengthen a powerful bullish momentum that can return the trading instrument to the levels of 1.1940 and 1.1985. We can talk about serious problems with the short-term bullish momentum only after the bears achieve a breakout of the support of 1.1850, which will quickly dump the trading instrument in the area of 1.1830 and then to the base of the 17th figure.

And in conclusion, I would like to say a few words about the US Department of Commerce report, which stated only a small increase in the personal income of Americans. According to the data, personal income increased by 0.1% in June after falling by 2.2% in May. This surge surprised economists, who had expected that personal income would fall by 0.3%. The slight increase in personal income is primarily due to an increase in wages in the private sector due to a shortage of qualified specialists and personnel. The Commerce Department reported an increase in personal spending of Americans, which jumped by 1.0% in June after they declined 0.1% in May. Economists had expected personal spending to grow by 0.7%.