US jobless claims decline to 48-year low
Fundamental outlook
US’ jobless claims declined to a 48year low despite housing number missing forecast. US retail sale and industrial production rose above expectations. UK inflation indicators weakened which could be due to the Brexit policy.
US retail sales grew 0.5 per cent in June, better than expectations. Core retail sales, excluding automobiles, rose 0.4 per cent, matching forecast. Industrial production rose 0.6 per cent in June, higher than expectations and compared with minus 0.5 per cent recorded in May.
US jobless claims at 207,000 in the week ended July 14 was the lowest record since 1969. Building permits grew 1.27 million in June while housing starts expanded 1.17 million. Both were below forecast.
China’s GDP for 2Q grew at a steady pace of 6.7 per cent. Industrial production climbed six per cent in June from a year ago, below forecast.
Japan’s core consumer prices rose 0.8 per cent in July from a year ago. Trade surplus grew 700 million yen in June, below forecast.
The eurozone’s final consumer prices rose two per cent in June on a yearly basis. Current account surplus grew at 22.4 billion euros in May, lower than forecast and the previous month’s record.
UK average earnings for the quarter ended May grew 2.5 per cent, matching forecast. Claimant count for jobless benefits rose to 7,800 cases in June, higher than consensus’ expectations. Unemployment rate stayed at 4.2 per cent.
British consumer prices rose 2.4 per cent in June from a year ago. Producer prices climbed 0.2 per cent on a monthly comparison after advancing at a revised 3.3 per cent in May. Retail sales declined 0.5 per cent in June after a revised 1.4 per cent gains reported in the previous month.
Technical forecast
US dollar/Japanese yen resisted at 113 and closed at 111.50 for the weekend. Technically, we reckoned the trend is top-ish and profit-taking has begun. This week, the market is likely to thread from 111 to 113 in mixed sentiment. Breaking beyond the aforementioned range could initiate a new headway,
Euro/US dollar has been moving sideways but was prone to climb from a technical outlook. This week, we forecast the support will be strong at 1.1630 and would likely lead to trending higher at 1.1850 area. The support must not be violated in order to project our bullish recovery, otherwise risk control needs to be exercised.
British pound/US dollar has exhibited strong support at 1.30 although there was a brief dip below this benchmark last week. This week, we predict the range will likely recover while prices could be contained from 1.30 to 1.33. Generally, the market expects the dollar to recede in order to see recovery in the euro and pound.
Disclaimer: This article is written for general information only. No liability by the writer, publisher or any third party involved in the distribution of this work. Dar Wong is a registered fund manager in Singapore with 29 years of global trading experiences. You may reach him at dar@pwforex.com.