After the pair hit weekly highs above 1.3220; it is now focused to test yesterday’s lows of about1.3160, as its buying interest is speedily fading within t investors. The day before, flash inflation of Germany’s figures are expected with unanimous consensus of an expanded headline consumer prices at a yearly pace of 0.8% for the month of August. A change of the US GDP for the 2nd quarter is expected to be out next before the weekly labor market report. Chief FX Strategist at Scotiabank, Camilla Sutton noted that bearish technical’s adding a short and medium term study warning of downside risk. A temporary relief today should help keep away the RSI from 26. The 50% Fibo retracement of the period from June 2012 to May 2014 rally at 1.3018 is the next most important support level. The deescalating trend of is too strong to overcome and accordingly are biased to position.
The pair is moving down to 0.13% at 1.3174 together with a next support at 1.3152 a trend low Aug.27. It is followed by 1.3105 low of Sep.6 2013 and finally to 1.3089 low of Jul.19 2013. On the positive side, there is a break above 1.3222 in the high of Aug.28 that would open the door for 1.3297 high in Aug.22 to go before the 1.3324 high of Aug.20.
Last Thursday, the dollar was at its highest in almost a year as gloomy data of the German economy strengthened expectations for incentive from European CB.
Second quarter strong reading on U.S. GDP encouraged traders to bet Fed Reserve that may increase hike rates sooner than forecast. GDP rose by 4.2% during the April-to-June period.
The dollar and yen, considered as safe haven currencies escalated following news that Ukraine’s government has accused the Russian invasion along its south-eastern border. Foreign Ukraine’s ministry said recent Russian action is a clear actuation that Moscow is drawing Ukraine and the entire world into a full-scale war.
USD upped $1.3170 against the euro, showing an 11-month peak set in the week. In August, the German had an unexpected raise as the euro largest economic zone in Europe shows signs of stress. Jobless people climbed from 2,000 million to 2.901in the August official data.
As euro zone plunged to its lowest level in eight months, economic confidence weakened more-than-expected. Confidence economic index fell to 100.6 in August considered as the lowest score since December, from 102.1 in July. The green buck climbed higher to $1.6571 compared with the sterling that newly reached a four-month high toward $1.6540. However, USD was below Y104 against the yen, as it did not accomplish this month’s gains.
EU’s common currency crashed into a 21-month low point against the Swiss franc.
Market figures showed 1.2052 francs per euro on the EBS FX trading platform following news reports about the Ukraine.
It was previously off 0.12 percent at 1.2054 francs.
Against the Japanese yen, the euro dropped to a two-week trough of 136.41 yen per euro. It was last recorded at 136.51 and down only by 0.4 percent. The euro traded at $1.3169, losing by 0.2 percent.
The Japanese yen and Swiss franc went up in currency markets worldwide. Meanwhile, the US dollar was down 0.2 percent against the two currencies.
Selling of the euro declined earlier due to the increasing speculation that European policy makers will accelerate monetary slackening to drive economic growth in the region.
However, selling accelerated yesterday after Ukraine alleged that Russia was sending troops across its border. Tensions remained high.
Currency strategists based in Europe said that if the situation gets worse, the clear loser is the euro currency. Germany, which is the biggest economy in the euro zone, is one of Russia’s major trading partners.
The standard stock index of Asia is on its way towards a drop, the first since April with indications basically unchanged.
Telecommunication shares moved forward while material shares deteriorated.
The Asia Pacific Index (MSCI) lost 0.1 percent to 148.20 in Tokyo before markets begin trading in Hong Kong and China. The gauge is primed for a 0.4 percent fall and 0.2 percent weekly decrease. Standard & Poor’s 500 Index moved back below 2,000 amid fighting in Ukraine and unsatisfactory retail earnings. These overshadowed data which showed economy swelled more than projections during the last quarter.
Nonetheless, investment strategists forecasted that Asian stocks will perform well in the short-term despite resistance levels. Market sentiment will not really be affected by basic or geopolitical factors.
Topic Index in Japan hovered between gains and losses as the Yen improved for two days and traded at 103.72 against the US dollar.
Australian S&P as well as ASX 200 Index hardly moved while South Korea’s Index lost a bit at 0.4 percent. New Zealand’s Index also fell 0.3 percent.
Futures on the Hang Seng Index in Hong Kong fell 0.4 percent.