July Market Overview

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Forex Trading News

$Us Dollar: The month started with disappointing jobs data despite increased Consumer Confidence and the reduction in Unemployment Rate to 5.3%. Core retail sales unexpectedly dropped in June, Trade Balance, Unemployment Claims and PPI increased. Fed Chair Yellen in her testimony to Congress 15 July stated that the Labor market has continued to show progress towards the objective of maximum employment and despite the inflation below the longer-run objective the FOMC continued to anticipate that it will be appropriate to raise the target range for the federal funds rate when further improvement is seen in the labor market and there is reasonable confidence that inflation is moving back toward 2% objective over the medium term.

Second half of the month saw building permits up, no change in CPI, and the reduction in consumer sentiment on concerns that global risks will dim prospects for the US economy. The third week ended with the strongest weekly jobless claims figures since 1973. US dollar remained mixed.

 

EurUsd
EurUsd

 

EurUsd: Euro has been under intense pressure due to Greece concerns and the perception of real possibility that it may leave Euro Zone after an overwhelming “NO” vote in Greek Bailout Vote against accepting further austerity. A new bailout deal averted Greece’s immediate exit from the euro zone and it was approved by Athens. Final details are being negotiated.

German ZEW economic sentiment came below expectations as did French and German Flash Manufacturing PMI. That did not stop the Euro rising against the dollar in the last week, retracing back towards 50 Fib. Potentially finishing Phase 2.

 

GBPUsd
GBPUsd

 

GBPUsd :  Pound fell in the first week following Euro Greek concerns and unfavourable manufacturing PMI,  recovering back to 50 FIB after official interest rate remained on hold and Greek concerns somewhat eased. CPI Y/Y came at 0 as expected, Average Earnings Index 3m/y, Claimant Count Change and Retail Sales all came below expectations resulting in a downward pressure on the Pound and a new Phase one.

 

AudUsd
AudUsd

 

AudUsd: Lower than expected Trade balance and Retail sales together with weak data from China saw Ausie weakening at the start of the month. Interest rates remained on hold. Second week brought Unemployment Rate lower than expected, improved Employment Change and Chinese CPI y/y which saw AUD bouncing sideways on top of 0.7410; further dropping below the level on mixed data and drop in Gold and weak commodity prices. It closed below 0.7325 and reached the bottom of the weekly downward channel.

 

NzdUsd
NzdUsd

 

NzdUsd: Kiwi moved sideways throughout the first half of the month mainly above 0.6680, breaking below long term support of 0.6570 after lower than expected CPI q/q. Third week saw it moving back up to 0.6680 with un upward pressure, initially even after further reduction in the interest rate. Potential beginning of Phase 1 down. Once the support of 0.6570 is broken the next target 0.6428 and then potentially it could move down to 0.6187. Caution due to Boolish MACD divergence.

UsdCad: Cad continued it’s decent and it now closed above 1.3010 the long term resistance. Mid month saw further reduction in the interest rates. Should the trend continue the next target is 1.3360, 1.3800 and then it could go as high as 1.400.

 

Week ahead in the News

Usd: Core Durable Goods Orders m/m, CB Consumer Confidence, FOMC statement and Federal Funds Rate,  Advanced GDP q/q and Unemployment Claims.

Care to be taken with the running positions around FOMC time.

Eur German Ifo Business Climate;  GBP: Preliminary GDP q/q,  Aud: Building approvals m/m, PPI q/q; Cad GDP m/m; Nzd ANZ Business Confidence.

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