During his ECB Press Conference, President Draghi said that growth forecasts for the Eurozone will keep on the good pace though inflation is doing worse than expected. Growth projections were made considering EUR/USD @1.18 level (the current or higher levels are considered due to excessive volatility and this is considered to be slowing down CPI measures) and in October some clearer actions will be taken in order to push inflation upwards (possibly by monitoring EUR/USD and reducing overshooting in EUR currency levels).
U.S. ISM Non-Manufacturing PMI worse than expected.
Last Eurozone Manufacturing PMI was disappointing. German and Spanish Retail Sales were also worse than expected. German Employment figures in stall and Italian Unemployment rate rises.
German Manufacturing PMI better than expected but German ZEW Economic Sentiment again worse than the expectations (for the 4th time in a row): the ZEW research institute said its monthly survey showed its economic sentiment index fell to 10.0, the weakest reading since October.
In Europe only CPI ticked up.
On the other hand, U.S. ISM Manufacturing PMI better than expected (at the highest since November 2014), U.S. ADP Nonfarm Employment Change way better than expected and U.S. GDP surprisingly relevantly better than expected. Also U.S. CB Consumer Confidence was higher than expected (at its highest since March).
We are facing two possible scenarios. 1) Fake breakout of both 1.199 and 1.19 are likely to be re-absorbed (we still think this as the most probable). 2) 1.20 area will be definitely violated once again. Weak Jobs Report, North Korea Crisis, Hurricanes and delayed Trumponomics are weighing on USD outlook but Draghi conference anticipated upcoming controls against the risk of an overbought EUR.
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: Neutral
1st Resistance: 1.1990 (fake breakout)
2nd Resistance: 1.2080
1st Support: 1.1920
2nd Support: 1.1856
Eyes on today UK Manufacturing Production.
UK Services PMI worse than expected. Last UK Construction PMI also worse than expected while UK Manufacturing PMI was better than expected.
Longer than 1 year ago, Brexit happened and now London is starting to do an analysis about Brexit effects and outcome.
- GDP slowed down (it is the Eurozone Slowest growth, even Greece grew more)
- High Consumer Price (with freezed wages and salaries, the effect is a widespread social impoverishment)
- Hard Brexit was just only a rumor: London is starting to understand that Brexit is a jump into nowhere (especially as far as financial sectors are concerned).
The last resort for the UK, is in the next elections in Germany (they hope a surprise will occur in Germany): without Merkel, London will probably rely on softer Eurozone policies regarding the UK. But this possibility is not given for granted either.
We think that GBP is heavily overbought and 1.3099 fake breakout will be re-absorbed with downside target in area 1.304. If the upward overshooting will continue, then next stop is definitely 1.32 Resistance.
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: 1.3099 (fake breakout)
2nd Resistance: 1.3203
1st Support: 1.3040
2nd Support: 1.2850
Australia reported home loans data for July jumped 2.9%, compared with a 1.0% gain seen. But Trade Balance and Retail Sales worse than expected, and GDP on the downbeat too.
Last Australian Manufacturing Index was better than expected and private new capital expenditure for the second quarter jumped 0.8%, well above a 0.3% gain seen. Also Building Approvals and Construction Work Done better than expected.
On the other hand, U.S. ISM Manufacturing PMI better than expected (at the highest since November 2014), U.S. ADP Nonfarm Employment Change way better than expected and U.S. GDP surprisingly relevantly better than expected.
AUDUSD temporarily rising up because of USD weakness rather than because of AUD strength.
Breakout of 0.783 on the downside is postponed and this means that a definitive breakout of 0.803 area has some chances to happen. As we wrote previously, there is room up over 0.804 area until 0.81 area.
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: Neutral
1st Resistance: 0.8034
2nd Resistance: 0.8130
1st Support: 0.7980
2nd Support: 0.7916