Dollar was under pressure after disappointing housing sector news

The Dollar fell against the Yen on Thursday, dragged down by disappointing news in the US housing sector and steep losses on Wall Street. However, the Dollar was slightly higher against the Euro, which came under pressure as soft data cooled expectations of higher euro-zone interest rates. The Ifo report followed data showing declines in manufacturing and service sector activity in France, Germany and the wider euro zone. Modest gains in Oil prices also weighed on the Dollar on Thursday. US crude futures rose 0.8% to 125.50 per barrel. The biggest mover among major currencies on Thursday was Sterling, which fell sharply against the Euro and Dollar on the 3.9% fall in June UK retail sales.

News and Events:


The Dollar fell against the Yen on Thursday, dragged down by disappointing news in the US housing sector and steep losses on Wall Street. However, the Dollar was slightly higher against the Euro, which came under pressure as soft data cooled expectations of higher euro-zone interest rates. The Ifo report followed data showing declines in manufacturing and service sector activity in France, Germany and the wider euro zone.

The pace of US existing home sales fell in June to a 4860k unit annual rate, the National Association of Realtors said. Poll of Economists was expecting a drop to 4930k. In another report, the government said initial jobless claims rose more than expected in the latest week.

Yesterday, EurUsd was unchanged at 1.5686, well below its record high of 1.6039 set last week. It had earlier slipped to 1.5628, the lowest in more than two weeks, immediately after the German Ifo business climate report. UsdJpy dropped 0.57% to 107.30. Modest gains in Oil prices also weighed on the Dollar on Thursday. US crude futures rose 0.8% to 125.50 per barrel. The biggest mover among major currencies on Thursday was Sterling, which fell sharply against the Euro and Dollar on the 3.9% fall in June UK retail sales. GbpUsd was last down 0.71% at 1.9832.



Today's Key Issues (time in GMT):


08:30 GBP Q2 GDP prelim 0.2% vs 0.3% (QoQ)
08:30 GBP Q2 GDP prelim 1.6% vs 2.3% (YoY)
12:30 USD June Durable goods ex-defence -0.3% vs -0.6%
12:30 USD June Durable goods ex-transport -0.2% vs -0.8%
12:30 USD June Durable goods -0.3% vs 0.0%
13:55 USD July University of Michigan Conditions final 67.5 vs 67.6
13:55 USD July University of Michigan Expectation final 48.3 vs 49.2
13:55 USD July University of Michigan Sentiment final 56.4 vs 56.4
14:00 USD June New home sales-units 500k vs 512k
The Risk Today:

EurUsd:
Market broke on Wednesday 1.5800 support which lightly undermine the current 3-month uptrend. Further weakness might play in 1.5400 – 1.5800 consolidation range. Below, strong support holds 1.5304 13th June low. Key initial resistance holds 1.6000. A break up there would open the way to Trendline resistance 1.6200.


GbpUsd:
Cable is set in short term 1.9800 – 2.0100 trading range. It hit 2.0158 high last week. Key level holds again 2.0100. On the downside, only a return below 1.9649 might bring again focus on 1.9337 January low and 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Initial support holds 1.9649 July 7th low. Strong support holds 1.9363 20th February and 14th May low.


UsdJpy:
Wednesday recover pushed the market near 108. Friday strong Dollar rebound put focus on mid-June 108.59 resistance and 110.10 strong resistance (Trendline). Further advance would open the way toward 111.92 early January high. On the downside, a return below 105 may open the way toward 102.73 support and 100 pivot point.


UsdChf:
Market hit 1.0013 last week. Further weakness below 1.0000 may open the way toward 0.9637 17th March low. Recent strength pushed over 1.0200 near 1.0400 high which reopen the 1.0200 – 1.0600 consolidation range. Initial resistance holds 1.0402 Wednesday high.



Resistance and Support:



By
Jean-Claude Braha
- ACM Advanced Currency Markets, Geneva, Switzerland