The Eurozone trade balance data for July released yesterday exceeded forecasts, coming in at €21.2 billion compared to the expected €14.9 billion. The June balance was slightly lower than the previous estimate at €21.7 billion. At the same time, the stock market and commodities rose, the dollar index dipped by 0.36%, and the euro gained 57 pips. However, other currencies did not share this optimism before the Federal Reserve meeting.

In yesterday's analysis, we expressed doubts about the euro reaching the target level of 1.1186, and those doubts remain today, as yesterday's high nearly coincides with another level—the December 2023 peak. A reversal from this point is entirely possible. The daily Marlin oscillator is showing an intention to return to negative territory. If the markets continue buying risk assets, it would signal aimless market wandering. We believe the euro will gradually return to the support level at 1.1085, where it will encounter the FOMC release from the Fed.

On the four-hour chart, the price has moved above the upper boundary of the short-term price channel, which also appears to align with the picture of aimless market drifting. As a result, there could be significant movements in both directions when the Fed announces its rate decision. Ultimately, our main scenario is for the euro to decline below the 1.1010 level.