Dollar is regaining some momentum in early US session as it extends recent rise against Sterling, Aussie and Loonie. Economic data released from US saw initial jobless claims rose back to 302k in the week ended July 26. Continuing claims also rose back to 2.54m in the week ended July 18. Employment cost index rose 0.7% in Q2. Challenger report showed 24.4% yoy rise in planned layoffs in July. But overall, markets seemed to have paid little attention to the data and looks set to bid the dollar further up ahead of tomorrow’s non-farm payroll report. Released from Canada, GDP rose more than expected by 0.4% mom in May versus consensus of 0.3% mom but that provided no support to the falling loonie.
In Eurozone, CPI unexpectedly dropped further to 0.4% yoy in July versus consensus of being unchanged at 0.5% yoy. That’s also the lowest level since October 2009 and CPI stayed below 1.0% for 10 straight months already. On the other hand, unemployment rate dropped to 11.5% in June, the lowest level since September 2012. The number of unemployed dropped by 152k to 18.4m and that’s the largest month-to-month fall since December 2013. Overall, the set of data is unlikely to trigger any imminent response from ECB. From Germany, unemployment rate was unchanged at 6.7% in July while unemployment fell -12k. The Euro is mildly lower in cross today but stays the second strongest currency next to dollar over the week.
Released earlier, UK Gfk consumer sentiment dropped to -2 in July. Australia import price dropped -3.0% qoq in Q2, building approvals dropped sharply by -5.0% mom in June. Japan labor cash earnings rose 0.4% yoy in June while housing starts dropped -9.5% yoy in June.
Daily Pivots: (S1) 1.6882; (P) 1.6918; (R1) 1.6948; More…
GBP/USD’s fall extends to as low as 1.6860 in early US session and the decline from 1.7190 continues. Intraday bias remains on the downside for the moment. As noted before, a medium term could be formed at 1.7190 already and the trend is reversing. Deeper fall should be seen to 1.6692 key support level for confirmation. On the upside, above 1.6928 minor resistance will turn bias neutral and bring consolidations. But recovery should be limited below 1.7058 resistance and bring fall resumption.
In the bigger picture, price actions from 1.3503 (2009 low) are treated as consolidations to long term down trend from 2.1161. Based on unconvincing medium term momentum, we’d expect strong resistance from 50% retracement from 2.1161 to 1.3503 at 1.7332 to limit upside and bring reversal. Sustained break of 1.6692 will indicate medium term reversal and would turn outlook bearish for 1.4813 support.
GfK Consumer Sentiment Jul
Import Price Index Q/Q Q2
Building Approvals M/M Jun
Labor Cash Earnings Y/Y Jun
Housing Starts Y/Y Jun
German Unemployment Change Jul
German Unemployment Rate Jul
Eurozone Unemployment Rate Jun
Eurozone CPI Estimate Y/Y Jul
Eurozone CPI – Core Y/Y (JUL A)
Challenger Job Cuts Y/Y Jul
GDP M/M May
Employment Cost Index Q2
Initial Jobless Claims (JUL 26)
Chicago PMI Jul
Natural Gas Storage