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American Housing Sale Slows Down in Demand

A guest post written by DAR Wong

Currency Market Observations – 31 July 2017

Fundamental Outlook

The U.S. housing sales stay murky while core orders climbs at slower pace. Federal Reserve may trim balance sheet faster before year-end. Japan traps in low inflation. Germany charts historical record in business climate survey.

The U.S. existing home sales grew 5.52 million in June and lowest in 4 months record. The U.S. Conference Board for consumer confidence jumps to 121.1 in July and higher than revised 117.3 in June.

Another separate report on new home sales grew 610,000 in June and almost flat from previous month. Crude inventories reduced by 7.2 million in previous week and lifted the demand before weekend.

The U.S. jobless claims for the week ended 22 July steadied at 244,000 in line with forecast. Core durable goods, excluding transportation equipment, rose 0.2 percent in June and below forecast. Advance GDP for Q2 grew 2.6 percent and beat forecast, making best in past 3 quarters.

Federal Reserve policymakers remain interest rates unchanged this month but say the trimming of balance sheet may begin in September. Gold prices climb after the FOMC announced no immediate action.

Japans core consumer prices rises 0.4 percent in July on year basis while Tokyo city expands 0.2 percent from a year ago. Retail sales grew 2.1 percent in June on year. Unemployment stays health at 2.8 percent in June.

German manufacturing index rises to 58.3 while services index expands to 53.5 in July, both data below forecast. Another date on monthly Ifo business climate rises to 116.0 in July and makes highest historical record.

U.K. releases prelim GDP for Q2 at 0.3 percent growth compared to revised 0.2 percent in Q1. Mortgage approvals for June were 40,200 and maintained almost same as forecast.

Technical Forecast

USD/JPY has been trading as we predicted last week while hovering around 110.50 area. There should be support and continues to lead the trend into sideways for coming week. We expect the range to move from 110.50 – 112.00 region around EMA200 line while waiting for more fundamental news.

EUR/USD has been climbing for three straight weeks and settled at 1.1750 on Friday. Technically, we foresee the range has reached EMA200 line on week-chart and should encounter some selling force this week. The trend may move from 1.1650 – 1.1800 in tight range until we see a reversal on the downside due to profit-taking.

GBP/USD has reached the resistance area around 1.3150 level. Market trend has moved into sideways consolidation without a new directional trend until it breaks beyond. Range is expected from 1.300 – 1.3200 region for time being while traders still watch the BREXIT progress.

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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