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American Claims Decline to 48-Year Low

A guest post written by DAR Wong

Currency Market Observations – 23 July 2018

Fundamental Outlook

The US retail sale and industrial production rise above expectation. Jobless claims decline to 48 years low despite housing number miss forecast. UK wanes in inflation indicators and probably influenced by Brexit policy.

The US retail sales grew 0.5 percent in June and better than expectation. Core retail sales, excluding automobiles, rose 0.4 percent and matched forecast. Industrial production rose 0.6 percent in June, higher than expectation and versus minus 0.5 percent in May.

American jobless claims at 207,000 in the week ended 14 July and lowest record since 1969. Another report on building permits grew 1.27 million in June while housing starts expanded 1.17 million. Both were below forecast.

China’s GDP for Q2 seasons grew 6.7 percent in steady pace. Industrial production climbed 6.0 percent in June from a year ago and missed forecast.

Japan’s core consumer prices rises 0.8 percent in July from a year ago. Trade surplus grew JPY700 million in June and below forecast.

Eurozone final consumer prices rose 2.0 percent in June on year basis. Current account surplus grew at EUR22.4 billion in May, lower than forecast and previous month.

UK average earning on quarterly seasons ended May grew 2.5 percent and matched forecast. Claimant count for jobless benefits rose 7800 cases in June and higher than consensus. Unemployment rate stays at 4.2 percent.

British consumer prices rose 2.4 percent in June from a year ago and stagnated. Producer prices climbed 0.2 percent on month comparison after advanced at revised 3.3 percent growth in May. Another report on retail sales shrank 0.5 percent in June after reported at revised 1.4 percent gains in previous month.

Technical Forecast

USD/JPY was resisted at 113.00 region and closed at 111.50 level for the weekend. Technically, we reckon the trend is toppish and profit-taking has begun. This week, the market is likely to thread from 111.00 – 113.00 range in mixed sentiment. Breaking beyond the aforementioned range will initiate a new directional headway.

EUR/USD has been moving in sideways but prone to climb from technical outlook. This week, we forecast the support will be strong at 1.1630 and likely to lead the trend 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.

GBP/USD has exhibited strong support at 1.3000 though there was a brief dip below this benchmark last week. This week, we predict the range will likely recover while prices contain from 1.3000 – 1.3300 region. Generally, market expects Dollar to recede in order to see recovery in Euro and Pound prices.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

DAR Wong is a registered fund manager in Singapore with 26 years of global trading experiences. You may reach him at dar@pwforex.com

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

 












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