The Dollar slipped against the Euro on Tuesday, breaking a five-session rally as investors locked in profits ahead of key economic data later in the week. EurUsd has already dropped 4.11% this month with help from a sell-off in Oil prices and growing fears economies elsewhere may slow at a faster pace than in the United States. Oil prices traded down 1.31% on Tuesday at $113 per barrel, after dropping more than $35 since a record 145.45 high hit in July. Data on Tuesday showed the US trade deficit shrank unexpectedly in June to $56.8b, down from a revised $59.2. But losses in the Dollar were limited as investors awaited data on US retail sales and consumer prices for July, due out Wednesday and Thursday.
News and Events:
The Dollar slipped against the Euro on Tuesday, breaking a five-session rally as investors locked in profits ahead of key economic data later in the week. EurUsd has already dropped 4.11% this month with help from a sell-off in Oil prices and growing fears economies elsewhere may slow at a faster pace than in the United States.
Yesterday, EurUsd slid to a six-month 1.4816 low after breaking a series of key chart levels, convincing some analysts that the Dollar may be ending its seven-year slide. Also, Dollar demand waned on Tuesday and investors shrugged off data showing the US trade deficit unexpectedly shrank in June. The Dollar also accelerated its losses against the Yen in late afternoon trading after selling on Wall Street picked up speed.
EurUsd edged up 0.13% at 1.4891 after earlier touching a six-month low of 1.4816. UsdJpy was 0.79% lower at 109.29, a day after hitting a seven-month peak of 110.40. EurJpy fell 0.91% at 162.74. GbpUsd fell to a 1-1/2 year low at 1.8954, down 0.84%. UsdChf rose 0.13% to 1.0878 after hitting 1.0926 6-months high.
Oil prices traded down 1.31% on Tuesday at $113 per barrel, after dropping more than $35 since a record 145.45 high hit in July. Fears of rising oil prices had been weighting on the outlook for the US economy.
Losses in the Dollar were limited as investors awaited data on US retail sales and consumer prices for July, due out Wednesday and Thursday. The economy is still ailing, with the financial sector recovering from a year-old credit crisis. Data on Tuesday showed the US trade deficit shrank unexpectedly in June to $56.8b, down from a revised $59.2.
Today’s Key Issues (time in GMT):
01:30 AUD Q2 Wage Price Index 1% vs 0.9% (mom)
01:30 AUD Q2 Wage Price Index -0.5% vs 0.6% (yoy)
08:00 NOK June Retail sales -0.4% vs 1.2%
08:30 GBP June Average earnings 3mth 3.6% vs 3.8% (yoy)
08:30 GBP July Claimant count unemployment change 17.5k vs 15.5k
08:30 GBP June ILO unemployment rate 5.3% vs 5.2%
09:00 EUR June Euro-zone Industrial production 0.1% vs -1.9% (mom)
09:00 EUR June Euro-zone Industrial production 0.2% vs -0.6% (yoy)
12:00 NOK Cenbank rate decision 5.75% vs 5.75%
14:30 USD July Export prices 0.6% vs 1%
14:30 USD July Import prices 1% vs 2.6%
14:30 USD July Retail sales ex-autos 0.5% vs 0.8% (mom)
14:30 USD July Retail sales -0.1% vs 0.1% (mom)
14:00 USD June Business Inventories 0.5% vs 0.3%
23:50 JPY June Tertiary sector index -0.3% vs -0.2% (mom)
The Risk Today:
EurUsd: Market dropped to 1.4816 low on Tuesday following Friday break below 1.5304 former strong support from 13th June. Further weakness below 1.5000 will put the focus on 1.4779 26th February low. Strong support holds 1.4685 22nd January low. On the upside, only a return over 1.5500 will release actual pressure and put key initial resistance 1.6000 into focus. A break up there would open the way to Trendline resistance 1.6200.
GbpUsd: Cable hit 2.0158 high 4-weeks ago and 1.8953 low yesterday. Key level holds 2.0100 resistance. On the downside, Friday break below on 1.9337 January low support lead to market below 1.9105 (50% retracement of 1.7049 � 2.1162 advance). Former support 1.9363 holds strong resistance. Initial support holds 1.8953 yesterday low.
UsdJpy: Last 3-weeks recovery pushed the market up to 110.40 high on Friday. The last break of 108.59 former resistance put focus on 110.10 strong resistance (Trendline). Further advance would open the way toward 111.92 early January high. On the downside, a return below 108.59 former resistance will undermine the current advance. Profit taking might bring back down to 105 level and may open the way toward 102.73 support and 100 pivot point. Initial support holds 108.53 today low.
UsdChf: Recent Dollar strength pushed over 1.0500 last week and hit 1.0926 high yesterday. Market broke up resistance of the 3-months upper trendline at 1.0766 last week. Initial support holds 1.0500 key level. Renewed weakness below 1.0375 would retest the 1.0000 pivot point and may open the way toward 0.9637 17th March low.
Resistance and Support:
By Jean-Claude Braha - ACM Advanced Currency Markets, Geneva, Switzerland