On Thursday, the U.S. dollar index continues to trade choppy due to lack of market-moving fundamentals. The market is currently trading the Risk-off theme which is driven by global slowdown across the board, for instance, a day before we saw weakening German data as well as a big miss on China data.
As per Reuters poll of foreign exchange strategists, the Chinese yuan is likely to decline further beyond the current 7 per dollar rate across the upcoming year as Beijing steps back from managing the currency amid tariff threats from Washington.
Economic Calendar – U.S & U.K’s Retail Sales In Play!
Retail Sales m/m – 8:30 GMT
The UK retail sales, listed to be published later this session at 8:30 GMT, is expected to sink -0.3% m/m in May, following a 1.0% figure seen in June. Indeed, no-Brexit sentiments and ongoing geopolitical tensions between the U.S. and China is making consumers frightened which is causing a drop in retail sales. Worse than expected figures may put extra weight on Sterling today.
US Retail Sales – 12:30 GMT
The US economy is focused on consumption and inflation figures as this has been an opulent cause of the growth of late. Headline sales are anticipated to decline in the report for July – 0.3% against 0.4% in June.
Whereas, the Core sales are anticipated to surge by 0.4%. The control group – which has surged by 0.7% in June – is anticipated to have improved at a moderate pace.
EUR/USD – Descending Triangle Breakout
A day before, the single currency Euro was attempting to break below the 1.1160 support and the 50 EMA. The major reason behind such a sell-off is the worse than expected GDP report.
Germany’s economy contracted in the second quarter as global risk and the trade war hurt German manufacturers. GDP for the three months concluded June shrank 0.1% versus the previous quarter, in line with analyst expectations. That’s down from 0.4% growth in the first three months of the year.
With that being said, If the bears continue to succeed, we may see a further drop in the EUR/USD until 1.1110. The immediate resistance stays at 1.1169 today.
EUR/USD – Daily Technical Levels
Pivot Point 1.1154
EUR/USD – Daily Forecast
I will be looking to wait for a slight retracement before taking a sell position below 1.1165. Whereas, the EUR/USD can stay bullish above 1.1113.
GBP/USD – Sideway Range Remains Intact
On Wednesday, as per the UK Office for National Statistics (ONS) report, the British Consumer Prices Index (CPI) came out at 2.1% in July, beating the 2.0% figure from June while exceeding expectations of a 1.9% report.
Meantime, the core inflation measure (excluding volatile food and energy items) came at 1.9% y/y last month compared to 1.8% booked in June while matching the consensus forecast of 1.8%.
Technically, the GBP/USD is trading sideways within a narrow range of 1.2100 – 1.2015. The relative strength index (RSI) is crossing below 50, suggesting bearish bias among traders.
Below 1.2015, Sterling has room to go for 1.1975. While a bullish breakout at 1.2102 is likely to extend bullish rally until 1.2160.
GBP/USD – Daily Technical Levels
Pivot Point 1.207
GBP/USD – Daily Forecast
I’m looking to stay bearish below 1.2100 and bullish above 1.2015 having placed my stop loss 30 pips below and above the entry price to capture 30/40 pips take profit.
Gold – Risk-off Sentiment Underpins Yellow Metal
Precious metal gold-mounted during the Asian session as the U.S. bond yield curve scared traders about growing recession risks. On the other hand, the protracted Sino-U.S. trade war continued to fears of global economic retardation, boosting the appeal for safe-haven assets.
Gold continues to stay supported amid trade war and other geopolitical tensions around the globe. Immediate resistance stays at 1524. It’s a crucial level as a violation of this open further room for buying until 1530/34.
On the lower side, gold is likely to face support around 1,517 and a bearish breakout can cause a drop until 1513. Overall, gold trades with the bullish sentiment, however, the U.S. retail sale and Philly Fed manufacturing may drive further trends during the New York session today.
Gold – Daily Technical Levels
Pivot Point 1,512.42
Gold – Daily Forecast
In my opinion, it’s better to stay bullish in gold above 1,512/10 to target 1,532 today.
All the best and have a profitable day!