US Consumer Confidence Fell In August As Employment Prospects Declined

· German CPI (MoM) (GER, 13:00 GMT)

· GDP (QoQ) (U.S, 13:30 GMT)

· Pending Home Sales (MoM) (U.S, 15:00 GMT)

· Beige Book (U.S, 19:00 GMT)

Confidence among U.S. consumers fell in August by the most in 10 months as households grew more pessimistic about their employment prospects and the economic outlook. The Conference Board’s index decreased to 60.6 from a revised 65.4 in July, figures from the New York-based private research group showed yesterday. Meanwhile, home prices in 20 U.S. cities climbed in June for the first time since a tax credit boosted sales in 2010, indicating the industry at the heart of the worst recession in the post-World War II era is starting to rebound.

Spanish President Mariano Rajoy held talks with European Council President Herman Van Rompuy on Tuesday in Madrid. During a press conference following the meeting the Spanish leader stressed the importance of finalizing the construction of the EU banking union by the end of 2012.

He also said that Greece's exit from the eurozone would be a failure for entire Europe. Van Rompuy praised the determination with which Rajoy's government was introducing reforms and assured that the EU was prepared to grant a bailout for Spanish banks as soon as a formal request was submitted.

According to an ECB spokesman, the central bank's president Mario Draghi decided to cancel his trip to the economic forum in Jackson Hole, Wyoming, due to a “a very heavy workload.” Draghi's speech was highly expected by investors who hoped for hints on ECB's bond purchase program. The ECB will hold its monthly monetary policy meeting on September 6.

EUR/USD: The EUR/USD was trading lower at 1.25547 at the time of writing after U.S. home price data came in much better than economists forecasted, overshadowing poor consumer confidence data. Trading is likely to be sticky on the European session ahead as investors are waiting for the Italian consumer confidence and retail sales at 07:00 GMT, German CPI at 11:00 GMT and Italy bond auctions to get some visibility on the pair early on.

Later in the day, Germany will release its CPI data at 13:00 GMT while, the U.S. will release its GDP data at 13:30 GMT and data on pending home sales, In addition, the Federal Reserve will release its Beige Book at 19:00 GMT. Yesterday, European Union President Herman Van Rompuy said the region’s rescue fund is ready for rapid action to aid Spanish banks and the news boosted the demand for the EUR intra trade.

Furthermore, sustained growth rates would put to rest for now talk the Federal Reserve will stimulate the economy with a new round of quantitative easing, which sees the Fed buying assets held by banks, pumping the economy full of liquidity to encourage investing and hiring, weakening the dollar in the process. Market sentiments are very sensitive to news. Investors should be very prudent. The resistance level is at 1.25905 and the support level is 1.25233.
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USD/JPY: The USD/JPY was trading slightly higher at 78.514 after stronger-than-expected housing data out of the U.S. fueled talk the Federal Reserve will hold off on whispered plans to stimulate the economy. Investors jumped to the sidelines ahead of the European session as they are waiting for some economic data in the eurozone to better assess the trend of the pair. The key risk events for the USD/JPY will come in the American session, where the U.S release its GDP (QoQ), Pending Home Sales (MoM) and the Beige Book. Speculations on the Federal Reserve Chairman Ben S. Bernanke’s speech this week and the European Central Bank, bond-buying program will drive the market. The resistance level is at 78.756 and the support level is at 78.341.
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Oil (WTI): Oil was trading lower at 95.860 at the time of writing after Hurricane Isaac made landfall and a report showed inventories rose the most since May in the U.S., the world’s biggest crude consumer. However, market sentiments remain positive on the commodity on growing hopes that European policymakers will approve a plan to allow the European Central Bank to participate in a sovereign debt-buying program. A Group of Seven finance ministers said in a statement that they were prepared to take action to make up for supply shortfalls caused by Isaac or elsewhere.

Moreover, a recent explosion at Venezuela's massive Amuay refinery that killed an estimated 41 people also kept prices elevated, as firefighters continued to battle blazes earlier. Besides the news above, investors will closely monitor the economic data in the eurozone and the U.S to better assess the trend of the commodity. The risk events for the price of oil today are the GDP (QoQ) data, Pending Home Sales (MoM) data and the Beige Book in the U.S. The resistance level is at 97.227 and the support level is at 94.958.