The new price barrier for the EUR/USD pair is 1.1750, which keeps the price from falling to the base of the 17th figure and below. Since Monday, traders have been trying to overcome this support level every day, but in each attempt, they are redirected to their previous positions. As a result, the pair determined the framework of the price level, the boundaries of which correspond to the lower and middle lines of the Bollinger Bands indicator (1.1750-1.1830). The bears are clearly in control of the situation for the pair – any more or less large-scale corrective pullback attracts sellers who open short positions and pull the price back to the area of the 17th figure. But at the same time, EUR/USD bears lack the determination to overcome the target of 1.1750. As soon as the pair goes below this mark, sellers take profits and the downward momentum gradually fades.

The most important events of the current week did not help traders to leave the above range. Neither the results of the ECB's July meeting nor the macroeconomic reports could provoke the corresponding volatility.

The European Central Bank disappointed both bulls and bears of EUR/USD. The new ECB strategy on symmetric inflation was announced in early July, so its official "presentation" did not surprise anyone. All the other verbal signals were of the usual nature: cautious optimism, skepticism about the growth of inflation, concern about the spread of the "delta strain", and an emphasized commitment to an accommodative policy. In other words, the ECB has announced a "standard set" of messages, the essence of which is reduced to a wait-and-see position. At least until September, when updated macroeconomic forecasts will be published.

However, what hypothetical changes can we talk about? The European Central Bank has made it clear that QE will operate at least until March next year, at the same time, rumors are actively spreading in the market that an "enhanced" asset purchase program (APP) will replace the PEPP, the volume of which can be increased to at least 30 billion per month. As for the fate of the interest rate, the prospects are more distant.

Following the results of the July ECB meeting, the euro soared throughout the market when the regulator announced that the rate would be increased when inflation in the eurozone reaches the 2% mark. But this rise was short-term, as the Central Bank clarified one important nuance, which concerns the so-called "transition period". During this time (which is not limited to any framework), the regulator is ready to "tolerate" inflation above the target. Taking into account the latest forecasts for consumer prices, we can come to a disappointing conclusion: the European Central Bank will not raise the key rate before the second half of 2024. This fact has put pressure on the euro and will continue to exert it in the future, especially when paired with the dollar, which lives by "hawkish" expectations.

But for the further development of the downward trend, EUR/USD bears need powerful information, ideally in the form of signals about the tapering of the US quantitative easing program. These signals may sound as early as next week, when the July meeting of the Federal Reserve will be held (the results will be announced on Wednesday, July 28).

It is noteworthy that both the Federal Reserve and the ECB declare the preservation of a wait-and-see position, simultaneously refuting rumors about a possible early tapering of QE. But if in the case of the European Central Bank, almost no one doubts the implementation of the declared program, then there is no such confidence about the Fed. Contrary to the"dovish" comments of Jerome Powell, rumors are persistently circulating in the market that the American regulator will announce the tapering of QE at one of the next meetings (or at an economic symposium in Jackson Hole). Also, among experts, you can often find the idea that the first round of rate increases will take place next year, and not in 2023.

Such rumors provide background support for the dollar. This support is likely to be felt until the announcement of the results of the July meeting of the Federal Reserve. The ECB has already said its word, macroeconomic reports have faded into the background (for example, the market successfully ignored today's data on PMI growth), and the members of the Federal Reserve observe a "silent mode" on the eve of the next meeting. The current information vacuum will play in favor of the greenback, as "hawkish" expectations still dominate the market. After all, according to a number of experts, inflation in the United States will show positive dynamics in the second half of the year, updating more and more new highs. Many indirect signs (including the growing cost of housing costs) suggest that key inflation indicators will come out in the "green zone", thereby justifying the "hawkish" expectations of investors.

In addition, some representatives of the Federal Reserve have been speaking in favor of normalizing monetary policy in recent weeks. In particular, St. Louis Federal Reserve President James Bullard recently became concerned about the inflation of the "bubble" in the housing market. His colleague, Robert Kaplan, spoke about the "danger of too slow actions". The hawkish message was also voiced by Federal Reserve Bank of Cleveland President Loretta Mester, who expressed the idea that "low rates can lead to excessive price increases."

It is far from certain that the July Fed meeting will be in favor of the greenback. But the previous expectations will certainly support the dollar, at least according to the trading principle "buy the rumor, sell the news". That is why short positions remain a priority for the EUR/USD pair. It is most expedient to go into sales at the peak of the upward impulses, and to be more precise, when the corrective price pullbacks are "fading". The target of short positions is the support level of 1.1750. There is no need to talk about lower values yet, given the cautious mood of investors ahead of the Fed meeting.