EURUSD, continues to seek support from buyers as price remains above the downward channel line. The EUR found support around the 1.0920’s, as the USD dropped on Friday following weaker than expected U.S. Q2 ECI data. In my July 29th analysis, I reported that EURUSD price “may return towards the 1.0970’s, before flipping to the long side for a re-test of the 1.1120’s.” The fact that recent price action has exceeded the 1.0970’s to test and establish a higher low at 1.0920 from the July 20th low of 1.0808, opens up a renewed recovery towards the July 27th 1.1120’s resistance area. Price may now attempt to extend the recovery to the 1.1220’s before resumption of the multi-week decline.
Friday saw better EU inflation data as inflation remained stable at 0.2%, although, it was weaker than U.S. employment data, which sent the EURUSD sharply lower. The move was seen by the market as overdone and the EURUSD quickly made it back to test the 1.10’s.
The U.S. Fed funds median still shows a 25 bp rate hike in September, Key reports are on tap this week, including payrolls, PMIs, income, and spending.
Currency Pairs, Grouped Performance (% change)
The Currency Movers Charts show the percentage change from previous five day close to the current moment against the other major currencies.
The GBP is trading firmer against the majors on the back of accelerating UK GDP data.
The CAD trades lower against most pairs, as Canada missed GDP expectations.
Significant daily support and resistance levels for these pairs are:
Main Macro Events Today
• UK Manufacturing PMI: There is downside risk after last week’s July CBI industrial trends survey unexpectedly declined to a -10 in the realized sales reading, which was the weakest since July 2013, reflecting the UK manufacturing sector’s sensitivity to the prevailing trade-weighted strength of the pound.
• USD Manufacturing PMI: July ISM will be released today and it’s expected that the headline to remain steady at 53.5 (median 53.8) for a second month.