EUR/USD continued to add value for the sixth consecutive day on Wednesday and EUR ended the session on a six-week peak. The single currency gained over 110 pips to a closing price of 1.1156. Additional gains were limited at 1.1212. The movement managed to overcome the levels at 1.1130, which encouraged the Bulls. Attitudes remain positive and 1.1270 – the next target.
Preview - ECB Minutes out at 10.30 GMT
Just a heads-up that we have the Minutes from the last ECB policy meeting coming up this morning
Previous Minutes have not released too many shocks or surprises, given that much of it is covered by the statement and presser on the day, but we need to be aware of their release
Forewarned is forearmed
Given the softer inflation scenario we should expect the Minutes to show strong support to continue QE until the proposed end date of Sept 2016 but we will be able to see the latest views/stance of each member
Next meeting is on 3 Sept where the PBOC devaluations and Greek bailout will be high on the agenda
EURUSD currently treading water around 1.1120 with an option expiry at 1.1100 in play and larger EURGBP option at 0.7100 also weighing on price action
ECB Minutes: Reaffirmed willingness to take further action if needed
Minutes from the last meeting on July 15-16 now out
EURUSD testing 1.1100 and EURGBP back down to 0.7105 on the more dovish sentiment
First it has to break above the resistance coinciding with the previous high at 1.1215. That said, I think it's very possible it will be able to do that.
EUR/USD possible rebound from 1.12000 I think for now let's see the rebound will continue till 1.0950 a possible short opportunity can be made.
EUR/USD almost unchanged ahead of E.Z. data
The euro was almost unchanged against the U.S. dollar on Friday, as investors eyed upcoming reports on euro zone inflation and second quarter growth, while Greek lawmakers continued to debate the conditions of a third bailout plan ahead of a key vote.
EUR/USD hit 1.1138 during late Asian trade, the session low; the pair subsequently consolidated at 1.1143.
The pair was likely to find support at 1.1079 and resistance at 1.1212, the high of August 12.
Earlier Friday, preliminary data showed that German gross domestic product rose 0.4% in the second quarter, disappointing expectations for an increase of 0.5% and after a growth rate of 0.3% in the three months to March.
In Greece, lawmakers debate through the night on whether or not to accept the conditions for the new €85 billion bailout program.
Euro zone finance ministers were scheduled to vote on the bailout later in the day.
The dollar remained supported after data on Thursday showed that U.S. jobless claims rose more than expected last week, but held near the lowest level since November 1973.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 8 rose by 5,000 to 274,000 from the previous week’s total of 269,000.
In addition, the U.S. Commerce Department said that retail sales increased by 0.6% last month, beating expectations for a gain of 0.5%, while core retail sales, which exclude automobile sales, rose by 0.4% in July, matching forecasts.
Meanwhile, the turmoil caused by the devaluation of the yuan two days in a row subsided after China's central bank said on Thursday that there was no basis for further depreciation in the currency, given China's strong economic fundamentals.
No Good News for Draghi: Euro Zone July CPI
Inflation in the 19-nation euro zone failed to remain in positive territory in July as the gauge showed red monthly numbers as well as weak annual data, according to the fresh report from Eurostat.
The CPI reading in the euro area came in at 0.2% in the seventh month of the year on an annual basis, after 0.2% growth recorded in the previous month, far below the European Central Bank's (ECB) medium-term target of year-on-year inflation of close to 2%.
On a monthly basis, prices in the single currency bloc posted 0.6% negative growth, due to a significant slide in commodity prices in recent weeks.
Meanwhile, core inflation hit 1.0%, the same result when compared to last month's reading of 1.0%.
Inflation probably won't reach the ECB's 2% target ceiling until at least 2017, according to a fresh Reuters poll of economists.
Prices in the shared currency bloc are now expected to rise to 0.2% this quarter and 0.7% in the final quarter of 2015, down from the 0.4% and 0.8%, respectively, forecast in last month's poll. Projections for next year were also reduced.
The sobering predictions come after six months of massive stimulus launched in March this year by the central bank, presenting some head-scratching options for ECB policymakers hoping to revive growth and kick off some meaningful rise in prices. The central bank is expected to continue its €1 trillion bond-buying program well into next year.
"Lower oil prices and the decline in the euro exchange rate have helped to boost the economy, supporting real growth in household spending and providing some uplift to exports," Capital Economics research team said in a note to clients.
"But unless oil prices and the euro fall substantially further, which we do not expect, these forces are likely to fade in the second half of this year and in early 2016."
After the strong performance on Wednesday, yesterday the pair remained with no significant changes. The euro was trading at a price of 1.1148 at the end of the session with drop of 8 points. However, the day proposed a certain volatility and extreme values were reached at 1.1187 and 1.1081. The chart continues to develop over the moving average, the index of relativity remains in positive territory, supporting the bulls in the short term.
Forex - EUR/USD: Pair Loses Steam, Falls Toward $1.1100
The EUR/USD fell slightly lower on Friday, losing around 0.30% during the US trading session, following the moderate volatility seen earlier, as dealers across the world take a rest after shifting the pair some 1.5% higher over a busy week.
In New York, the pair was trading with a loss of 0.33% at $1.1111 after US producers' prices firmed up in the previous month.
Regarding data released by the Department of Labor on Friday, producer prices for final demand rose 0.2% in July, slightly beating the market expectations of a 0.1% increase, following an unrevised 0.4% gain in June.
Moreover, the US industrial production added 0.6% month-on-month during July, following the revised 0.1% upturn seen in June.
The dealers favored the euro during the London session, with the pair climbing to daily highs as September's Federal Reserve rate hike seems questionable due to the latest developments in China's currency.
The euro traded 0.29% higher at $1.1180, only 30 pips from the 1-month high.
Earlier today, German GDP for the second quarter improved from 0.3% to 0.4%, although analysts had expected 0.5%. The yearly change came out at 1.6%, up from the upwardly revised 1.2% previously.
The US dollar failed to appreciate after somewhat positive retail sales on Thursday. Retail sales for July in the US grew 0.6% after a revision showed them flat in June. Retail sales ex autos grew 0.4% previously and the control core gauge jumped to 0.3%,the US Census Bureau advised. The reaction was subdued and after an initial small dip the pair returned to gains.
EUR/USD formed a doji candlestick on the daily filter chart, moved to the downside again and is currently testing the support at 1.1106 coinciding with the (89)MA on the same chart. I doubt it will be able to break below that level before the market closes today, so we'll probably have to wait at least until Monday.