AvaTrade | Aug 16, 2017 06:56AM ET
EUR/USD – continued to drop as the EUR weakened due to weak German GDP data and the USD strengthened on the backdrop of some strong US data. US sales data was much better than expected, especially since last month’s data was revised upwards and posted solid gains as well as very strong NY Empire State Manufacturing Index which was the highest in nearly 3 years. This led to another strengthening of the USD and will make the FOMC meeting minutes very interesting as we have seen that inflation is still lagging, although the other data indicates that the economy is progressing well as we also saw with the latest NFP and other data.
USD/JPY – the JPY continues to weaken as demand for the safe haven continues to lessen and we see an unwinding of JPY positions that were entered when the tensions with North Korea started. However, there have been some reports of an earthquake in North Korea yesterday which leads some to suspect that the country conducted another nuclear test although it was most likely a natural earthquake. Currently we are nearing the resistance just below the 111 level.
Dollar Index – with more risk appetite in the market and with the strong data the USD kept on growing stronger and is edging closer towards the upper band of the downwards trendline. We have more data today, but without a doubt it will be the FOMC meeting minutes which will decide on the direction. It could very well be that the rates will rise once more this year as we are already anticipating that the balance sheet will start being reduced next month.
Cocoa – drops sharply along with most other agriculturals are also still in a downtrend after the WASDE report of last week. When looking at the chart we can see that after reaching a high around the 2080 level we drop towards the 1800 level, so we could see cocoa drop to that level before correcting.
Alibaba (NYSE:BABA) – will be releasing its earnings tomorrow before the market opens as a revenue of $7.1 billion is expected.
Apple (NASDAQ:AAPL) – has gained over 8% this month after its strong earnings report and there is also a lot of expectation for its new iPhone 8 which is expected to be unveiled, along with other new products, next month.
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