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American Housing Data Slows Down

A guest post written by DAR Wong

Currency Market Observations – 20 August 2018

Fundamental Outlook

The US retail sales increase while housing data slows down. Eurozone expands in growth and consumer prices match forecast. UK consumer prices excel amid gradual slowdown in retail sales expansion.

The US retail sales grew 0.5 percent in July and better than consensus. Excluding transport equipment, core retail sales also rose 0.6 percent and higher than forecast and above previous month at revised 0.2 percent gains.

The US building permit rose 1.31 million in July and stagnated. Another report on housing starts grew 1.17 million and below forecast.

China’s industrial production including utilities and mines, rose 6.0 percent in July from a year ago, unchanged from previous month but below forecast. Another report on fixed asset investment grew at 5.5 percent in July on year-to-date compilation, lowest since the data began its monthly release.

German prelim GDP grew 0.5 percent in Q2 season and above expectation. Another report on German ZEW sentiment measuring institutional investors’ confidence slid to 13.7 reading and better than consensus.

Eurozone’s flash GDP advanced 0.4 percent in Q2 season and better than forecast. Among the 19 nations, consumer prices grew 2.1 percent in July on year basis. Core prices rose 1.1 percent on same period. Both data matched forecast.

UK average earnings on quarterly basis ended June climbed 2.4 percent and made lowest smallest growth in 9 months’ record. Claimant count in July at 6,200 versus revised 9,000 in June. Unemployment rate was at 4 percent in June and so far at its best record.

British consumer prices rose 2.5 percent in July from a year ago and highest in 4 months’ record. Producer prices climbed 0.5 percent on monthly basis versus revised 0.3 percent gains.

Another report on UK retail prices expanded at slowest pace in 16 months after gained 3.2 percent in July on year basis. Retail sales rose 0.7 percent in July.

Technical Forecast

USD/JPY traded in tight range last week. Market is uncertain of a sure trend but well supported at 110.00 that is confluent with EMA200 on day-chart. This week, we foresee the trend will be contained from 110.00 – 111.50 region with no clear directional trend. Risk control is advised if the trend breaks beyond the aforementioned region.

EUR/USD 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 contain from 1.1330 – 1.1530 region. Euro direction is still rather uncertain due to the Dollar effect that is reaching a temporarily stagnation. Traders should observe cautiously for the eventual breakout of the aforementioned trend.

GBP/USD bounced off 1.2660 region last week after declined for 3 weeks. The trend will be prone to make recovery with resistance emerging at 1.2900 area. In case of further dip, we foresee the trend will be supported at 1.2600 – 1.2650 region with strong bargain-hunting activity.

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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