US housing data slows down
Fundamental outlook US retail sales increased while housing data slowed down. The eurozone’s growth expanded while consumer prices matched forecast. UK consumer prices excelled amid gradual slowdown in retail sales expansion.
US’ retail sales grew 0.5 per cent in July, exceeding expectations. Excluding transport equipment, core retail sales also rose 0.6 per cent, beating forecast and above the previous month’s revised 0.2 per cent gains. The US building permit rose 1.31 million in July. Housing starts grew 1.17 million, below forecast.
China’s industrial production including utilities and mines, rose 6.0 per cent in July from a year ago, unchanged from the previous month and below forecast. Fixed asset investment grew at 5.5 per cent in July on a year-to-date basis, the lowest recorded since the data began its monthly release.
German prelim GDP grew 0.5 per cent in the second quarter (2Q), beating expectations. German ZEW sentiment measuring institutional investors’ confidence slid to 13.7 reading, better than consensus’ expectations.
The eurozone’s flash GDP advanced 0.4 per cent in 2Q, better than forecast. The region’s consumer prices grew 2.1 per cent in July on a yearly basis. Core prices rose 1.1 per cent during the same period. Both data matched forecast.
UK average earnings on a quarterly basis ended June climbed 2.4 per cent, making it the lowest slowest growth in nine months. Claimant count in July at 6,200 versus revised 9,000 in June. Unemployment rate was at four per cent in June, its best recorded so far.
British consumer prices rose 2.5 per cent in July from a year ago, the highest in four months. Producer prices climbed 0.5 per cent on a monthly basis compared with its previous revised 0.3 per cent gains. UK retail prices expanded at its slowest pace in 16 months after gaining 3.2 per cent in July on a yearly basis. Retail sales rose 0.7 per cent in July. Technical forecast US dollar/Japanese yen traded in a narrow range last week. The market is uncertain of a significant trend but it is still well supported at 110 that is confluent with EMA200 on the day-chart. This week, we foresee the trend will be contained from 110 to 111.50 with no clear directional trend. Risk control is advised if the trend breaks beyond the aforementioned region.
Euro/US dollar has shown support at 1.1300 while the market closed at 1.1430 for the weekend. This week, the trend will probably make a recovery but it could be contained within 1.1330 to 1.1530. The euro’s direction is still rather uncertain due to the dollar’s effect that is reaching a temporarily stagnation. Traders should observe cautiously for the eventual breakout from the aforementioned trend.
British pound/ US dollar bounced off the 1.2660 region last week after declining for three weeks. The trend will be prone to make a recovery with resistance emerging at 1.29. In case of further dip, we foresee the trend will be supported at 1.26 to 1.2650 with strong bargain-hunting activity set to occur.
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.