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Tuesday, August 15th
The EUR/USD pair accelerated its downside traction this morning after Germany released weaker-than-expected preliminary GDP data, however, meeting resistance near the level of 1.1700. Moreover, it is expected that the major currency pair will keep navigating to the south on Tuesday, as the US dollar extends its recovery after recent drop, backed by weak US inflation data. Meanwhile, seems that the dust around geopolitical tensions between the US and North Korea settled down after recent headlines, saying that North Korea decided not to launch ballistic missiles on Guam, leaving the euro without any support on Tuesday. On the data front, besides German fundamental reports nothing else is left in the EU economic docket, so global market trend will continue to navigate throughout the European trading session, while the US economy will release retail sales data, which will be able to determine next short-term trajectory for the pair during New York trades.
The AUD/USD pair failed to extend its recovery trend after yesterday’s drawdown, as RBA minutes was unable to surprise the market in Asia. The pair lost its positive traction after the release of RBA minutes, which reiterated concerns over higher Aussie and potential economic slowdown if AUD extends the rally. Adding to this, ongoing recovery of the greenback across the board also adds some bearish pressure on the pair lately. However, any sharp downside moves of the major seem unlikely, as easing US-North Korea tensions are boosting risk-on sentiments, which are positively affecting the pair. Looking ahead, it is expected that risk sentiments will remain the main theme of this day, while bloc of the US data will bring some trading opportunities in the NA trading session.
The dollar/yen pair extends its bullish rally on Tuesday, having refreshed its weekly highs at 110.45 level, as improved risk appetite remains the key determinant for the pair lately. Geopolitical tensions surrounding the US and North Korea continue to cool off, as, according to the latest headlines, North Korean Leader Kim Jong Un decided to cancel missile attack on Guam. However, Mr. Kim warned the US, that he could easily change his mind if the US continue to threaten N.Korea. Moreover, renewed positive tone of the US dollar after last week’s disappointing US inflation data is also collaborating with pair’s upside rally. Now all traders’ attention shifts toward the bloc of US economic releases, including retail sales data, which will be able to bring some impetus for the pair during the NA session, while risk-on trend will continue to navigate the pair throughout European trades.
The GBP/USD pair was oscillating in narrow range of 20 pips in Asia, ahead of key UK data releases. The pair was struggling to break out of its corridor this Tuesday, as several factors were pressuring the pair from both sides, while investors were gearing up for UK inflation figures. The pair receives bearish pressure lately, as the US dollar recovers across the board after Friday’s weak inflation data. On the other hand, renewed demand for higher-yielding assets, backed by easing tensions between the US and North Korea, is lending support to the pound on Tuesday. Today we will have eventful session ahead, as both calendar will keep investors busy during this Tuesday with crucial UK inflation data and bloc of major US fundamentals.
The main events of the day:
UK CPI – 11.30 (GMT +3)
US Retail Sales – 15.30 (GMT +3)
US Core Retail Sales – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1727 R. 1.1865
USDJPY S. 108.71 R. 110.25
GBPUSD S. 1.2915 R. 1.3045
USDCHF S. 0.9564 R. 0.9810
AUDUSD S. 0.7797 R. 0.7945
NZDUSD S. 0.7248 R. 0.7348
USDCAD S. 1.2636 R. 1.2774
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