THE GREENBACK HOLDS POSITIONS DESPITE CONTRADICTIONARY DATA
The euro price has fallen without substantial reasons today and despite negative news for the USD thanks to President Trump losing support from business circles that may lead to a deepening of the political crisis in the US. Traders mostly ignored the increase of the Eurozone’s trade balance surplus to 22.3 billion euro in July versus the 19 billion euro in June. The consumer price index in July remained at 1.3% which met an average market forecast.
Some support for the greenback came from the report on initial unemployment claims that reduced to 232,000 but it was partly offset by industrial production growth in America of only 0.2% in the previous month which is 0.1% less than expected. The markets also noted the negative effect from the lack of unity between the FOMC members concerning the question of a third rate hike for this year. The quotes are consolidating in anticipation of new drivers.
The strong data on retail sales expansion in the UK during the previous month by 0.3% against the expected 0.2% was not able to change the bearish sentiment for the GBP/USD and this reaction may point to a high possibility of further GBP/USD decline.
The strong demand for the US dollar was also able to offset positive news from the Australian labour market in July. The the unemployment rate fell by 0.1% to 5.6% and employment increased by 27,900 against the forecasted 19,800.
The volatility of EUR/USD remains high. Currently the quotes are trying to fix below 1.1700 and in case of success we are likely to see the quotes hitting 1.1620 and 1.1500. The RSI on the 15-mitute chart just rebounded from the oversold zone that gives the bears a chance to resume pulling the price down. In case of an upward correction the potential target will be 1.1800.
The bulls in GBP/USD were not able to succeed in gaining a foothold above 1.2880 and breaking through the upper limit of the descending channel. In case of leaving the channel and fixing above 1.2900 the immediate objectives will be at 1.2950 and 1.3050. On the other side, there remains an increased probability of a continued decline within the channel to the closest targets at 1.2800 and 1.2740.
The AUD/USD price rolled back to the SMA100 and is currently trying to resume growing. In this case the next targets will be at 0.8000 and 0.8050. The MACD signal line has crossed the zero level which is in favour of further decline to the closest support at 0.7900 or even below it.