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Tuesday, August 22nd
The EUR/USD pair corrects lower after yesterday's rally, having broken through the level of 1.1800 on the back of recovery of the US dollar across the market. Adding to this, slightly improved risk sentiments amid cooling off conflict between the US and North Korea also negatively affect the pair on Tuesday. However, all traders’ attention remains on the Jackson Hole Symposium, where members of CBs, including J.Yellen and M.Draghi, will deliver speeches on monetary policy of banks. That is why the market will keep its cautious stance ahead of the key event of this week. But for now all eyes remain glued to German ZEW Economic Sentiment, while the US economic docket will continue to keep silence for the second consecutive day, so broad market trend will remain as a key determinant for the pair throughout the NA session.
The USD/JPY pair broke out of its 4-day losing streak, bouncing off the region of 4-month lows, located below the level of 109.00, despite broad US dollar weakness. The pair regained the level of 109.00 and by the time of writing was consolidating its previous gains in the region of 109.20-30, as improved risk-on sentiments are weighing the yen. Seems that yesterday’s concerns surrounding geopolitical tensions between the US and N.Korea have faded away, allowing investors to shift their attention to more risky assets. Adding to this, further recovery of the US dollar may appear supportive for the pair, extending its gains. Today we have another quiet data session, so broad market risk sentiments and the USD price dynamics will remain key driving factors for the pair on Tuesday.
The AUD/USD pair was demonstrating low volatility level in Asia, consolidating its positions within a 20-pips narrow trading range just a few pips below the level of 0.7950. Seems that the pair was unable to determine its direction during Asian trading session amid lack of any fundamental drivers, while several factors failed to provide the pair with any impetus for further trajectory. On the one side, minor recovery of the US dollar did little to help bears to take control over the pair. On the other hand, improved demand for higher-yielding instruments and better sentiments surrounding commodity market, especially copper, are still lending some support to the Aussie. Looking ahead, the US docket will remain muted for the second session in a row, leaving the pair at the mercy of global market sentiments and the US dollar price actions on Tuesday.
Bitcoin extends retreat against its American colleague from its ultimate highs, marked at 4482.20 spot on August 17. The BTC/USD pair slipped below its psychological mark of 4000.00 and currently is trading in the region of 3800, having lost about 6% for the last 24 hours according to data available on coinmarketcap.com. Recent retreat of the cryptocurrency is mainly attributed to profit-taking action, after enormous rally of the digital currency, triggered by headlines that the Swiss private bank allowed customers to use Bitcoin within their accounts. However, recent retreat of the pair may appear temporary, as growing popularity of electronic cash is still gathering pace, while next important event for Bitcoin remains SegWit2x, which is scheduled on November.
The main events of the day:
German ZEW Economic Sentiment – 12.00 (GMT +3)
Canadian Core Retail Sales – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1692 R. 1.1888
USDJPY S. 108.21 R. 109.79
GBPUSD S. 1.2821 R. 1.2953
USDCHF S. 0.9549 R. 0.9719
AUDUSD S. 0.7895 R. 0.7973
NZDUSD S. 0.7289 R. 0.7355
USDCAD S. 1.2519 R. 1.2625
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