Daily FX Analysis For Aug 2, 2017: EUR, GBP And The AUD
SGT Markets | Aug 02, 2017 06:13AM ET
EUR/USD
German Manufacturing PMI and German Unemployment Change on the downbeat.
German CPI is better than expected. German Manufacturing PMI and Eurozone both Manufacturing and Services PMI were worse than expected.
The U.S. Commerce Department said Friday that gross domestic product increased at an annual rate of 2.6% in the three months to June, which included a boost from consumer spending. That was more than double the 1.2% growth seen in the first quarter. U.S. labor costs rose less than expected in the second quarter, data regarding inflation are lower than expected.
Deepening U.S. political uncertainty also expected to keep the greenback on the defensive. Still, we think USD is oversold.
U.S. Conference Board Consumer Confidence better than expected, both Manufacturing and Services PMI in the U.S.A. were better than expected as well but the Trump administration remains under the cloud of a probe into alleged Russian meddling in the U.S. 2016 presidential election.
On the other hand, ECB remarks appeared to signal a shift towards tapering monetary stimulus, but President Draghi reiterated that any changes to the stimulus program will be “gradual” and “cautious.”
1.1856 strong Resistance. We expect a correction downside to 1.1655.
Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Overbought
1st Resistance: 1.1756
2nd Resistance: 1.1856
1st Support: 1.1655
2nd Support: 1.1590
GBP/USD
UK manufacturing activity on the upbeat.
There’s no doubt that U.K. growth is slowing with the details of the GDP report showing weakness in the manufacturing and construction sectors. Growth is expected to ease further in the coming months as BREXIT gets underway.
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British Trade Minister said that it is perfectly reasonable that people want to have some transitional period until the final agreement with UE will be reached. "But we can't have a perpetual transitional period undermining the concept of Brexit itself," he added.
The agreement between Conservative Party and Democratic Unionist Party is still occupying only the background of the global Sentiment on Pound.
As we already wrote, 1.3203 is an ultimate Resistance and we think unlikely to see price overcome that obstacle in the short-term. 1.3099 Resistance should be reconfirmed as first downside target.
Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2001:
Weekly Trend: Overbought
1st Resistance: 1.3203
2nd Resistance: 1.3099
1st Support: 1.2978
2nd Support: 1.2830
AUD/USD
Australia reported building approvals for June jumped 10.9%, far outpacing a 1.5% gain seen month-on-month.
Oil climbed surging to an eight-week high, after the EIA reported that US stockpiles fell to levels which have not been seen since the start of the year. Investors were hoping for an industry drawdown, and both the commodity and the AUD reflected that in their value.
The U.S. Federal Reserve statement noted that interest rates are likely to remain low for "some time", highlighting that increases in its benchmark rate will depend on incoming economic data.
On the other hand, the dollar fell amid expanding investigations into allegations that Russia meddled in the 2016 U.S. presidential election (investors are afraid that would sidetrack the implementation of Trump’s fiscal and economic policies) and after repeated failure of Trumps’s healthcare bill, not able to garner enough votes for replacing Obamacare.
0.8034 very strong Resistance. We confirm that 0.783 area will have to be retested, and this represents our first target.
Our special Fibo Retracements are confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Overbought
1st Resistance: 0.7916
2nd Resistance: 0.8034
1st Support: 0.7828
2nd Support: 0.7735
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